Exhibit 10.1


CREDIT AGREEMENT


among


UNIVERSAL POWER GROUP, INC.

as Borrower,


MONARCH OUTDOOR ADVENTURES, LLC,

as an Obligated Party,


WELLS FARGO BANK, NATIONAL ASSOCIATION

as Agent,


WELLS FARGO SECURITIES, LLC,

as Lead Arranger,


and


the BANKS named herein


December 16, 2009









TABLE OF CONTENTS


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 


 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE I.

 	
  

 	
 DEFINITIONS

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 1.1.

 	
  

 	
 Definitions

 	
  

 	
 1

 
	
  

 	
 Section 1.2.

 	
  

 	
 Other
 Definitional Provisions

 	
  

 	
 15

 
	
  

 	
 Section 1.3.

 	
  

 	
 Accounting
 Terms and Determinations

 	
  

 	
 15

 
	
  

 	
 Section 1.4.

 	
  

 	
 Time of Day

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II.

 	
  

 	
 REVOLVING
 LOANS AND LETTERS OF CREDIT

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 2.1.

 	
  

 	
 Revolving
 Commitments

 	
  

 	
 15

 
	
  

 	
 Section 2.2.

 	
  

 	
 Evidence of
 Debt

 	
  

 	
 16

 
	
  

 	
 Section 2.3.

 	
  

 	
 Repayment of
 Loans

 	
  

 	
 16

 
	
  

 	
 Section 2.4.

 	
  

 	
 Revolving
 Commitment Fee

 	
  

 	
 16

 
	
  

 	
 Section 2.5.

 	
  

 	
 Use of
 Proceeds

 	
  

 	
 16

 
	
  

 	
 Section 2.6.

 	
  

 	
 Voluntary
 Reductions or Terminations of Revolving Commitments

 	
  

 	
 16

 
	
  

 	
 Section 2.7.

 	
  

 	
 Letters of
 Credit

 	
  

 	
 17

 
	
  

 	
 Section 2.8.

 	
  

 	
 Swingline
 Loans

 	
  

 	
 20

 
	
  

 	
 Section 2.9.

 	
  

 	
 Defaulting
 Banks

 	
  

 	
 21

 
	
  

 	
 Section
 2.10.

 	
  

 	
 Increase of
 Revolving Commitments

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III.

 	
  

 	
 INTEREST

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 3.1.

 	
  

 	
 Interest
 Rate

 	
  

 	
 23

 
	
  

 	
 Section 3.2.

 	
  

 	
 Payment
 Dates

 	
  

 	
 24

 
	
  

 	
 Section 3.3.

 	
  

 	
 Default
 Interest

 	
  

 	
 24

 
	
  

 	
 Section 3.4.

 	
  

 	
 Conversions
 and Continuations of Eurodollar Loans

 	
  

 	
 24

 
	
  

 	
 Section 3.5.

 	
  

 	
 Computations

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV.

 	
  

 	
 ADMINISTRATIVE
 MATTERS

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 4.1.

 	
  

 	
 Borrowing
 Procedure

 	
  

 	
 24

 
	
  

 	
 Section 4.2.

 	
  

 	
 Minimum
 Amounts for Borrowings and Prepayments

 	
  

 	
 25

 
	
  

 	
 Section 4.3.

 	
  

 	
 Certain
 Notices

 	
  

 	
 25

 
	
  

 	
 Section 4.4.

 	
  

 	
 Prepayments

 	
  

 	
 26

 
	
  

 	
 Section 4.5.

 	
  

 	
 Method of
 Payment

 	
  

 	
 27

 
	
  

 	
 Section 4.6.

 	
  

 	
 Pro Rata
 Treatment; Proceeds of Collateral and Guaranty

 	
  

 	
 27

 
	
  

 	
 Section 4.7.

 	
  

 	
 Sharing of
 Payments

 	
  

 	
 28

 
	
  

 	
 Section 4.8.

 	
  

 	
 Non-Receipt
 of Funds by Agent

 	
  

 	
 29

 
	
  

 	
 Section 4.9.

 	
  

 	
 Withholding
 Taxes

 	
  

 	
 29

 
	
  

 	
 Section
 4.10.

 	
  

 	
 Withholding
 Tax Exemption

 	
  

 	
 29

 
	
  

 	
 Section
 4.11.

 	
  

 	
 Capital
 Adequacy

 	
  

 	
 30

 
	
  

 	
 Section
 4.12.

 	
  

 	
 Compensation

 	
  

 	
 30

 
	
  

 	
 Section
 4.13.

 	
  

 	
 Additional
 Costs

 	
  

 	
 30

 
	
  

 	
 Section
 4.14.

 	
  

 	
 Limitation
 on Eurodollar Loans

 	
  

 	
 32

 
	
  

 	
 Section
 4.15.

 	
  

 	
 Illegality

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V.

 	
  

 	
 CONDITIONS
 PRECEDENT

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 5.1.

 	
  

 	
 Initial Loan

 	
  

 	
 32

 
	
  

 	
 Section 5.2.

 	
  

 	
 All Loans

 	
  

 	
 34

 



TABLE OF CONTENTS, Page i 









	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI.

 	
  

 	
 REPRESENTATIONS
 AND WARRANTIES

 	
  

 	
 34

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 6.1.

 	
  

 	
 Corporate
 Existence

 	
  

 	
 34

 
	
  

 	
 Section 6.2.

 	
  

 	
 Financial
 Statements

 	
  

 	
 35

 
	
  

 	
 Section 6.3.

 	
  

 	
 Corporate
 Action; No Breach

 	
  

 	
 35

 
	
  

 	
 Section 6.4.

 	
  

 	
 Operation of
 Business

 	
  

 	
 35

 
	
  

 	
 Section 6.5.

 	
  

 	
 Litigation
 and Judgments

 	
  

 	
 35

 
	
  

 	
 Section 6.6.

 	
  

 	
 Rights in
 Properties; Liens

 	
  

 	
 35

 
	
  

 	
 Section 6.7.

 	
  

 	
 Enforceability

 	
  

 	
 35

 
	
  

 	
 Section 6.8.

 	
  

 	
 Approvals

 	
  

 	
 36

 
	
  

 	
 Section 6.9.

 	
  

 	
 Debt

 	
  

 	
 36

 
	
  

 	
 Section
 6.10.

 	
  

 	
 Taxes

 	
  

 	
 36

 
	
  

 	
 Section
 6.11.

 	
  

 	
 Margin
 Securities

 	
  

 	
 36

 
	
  

 	
 Section
 6.12.

 	
  

 	
 ERISA

 	
  

 	
 36

 
	
  

 	
 Section
 6.13.

 	
  

 	
 Disclosure

 	
  

 	
 36

 
	
  

 	
 Section
 6.14.

 	
  

 	
 Subsidiaries

 	
  

 	
 37

 
	
  

 	
 Section
 6.15.

 	
  

 	
 Defaults
 under other Agreements

 	
  

 	
 37

 
	
  

 	
 Section
 6.16.

 	
  

 	
 Compliance
 with Laws

 	
  

 	
 37

 
	
  

 	
 Section
 6.17.

 	
  

 	
 Investment Company
 Act

 	
  

 	
 37

 
	
  

 	
 Section
 6.18.

 	
  

 	
 Environmental
 Matters

 	
  

 	
 37

 
	
  

 	
 Section
 6.19.

 	
  

 	
 Solvency

 	
  

 	
 38

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII.

 	
  

 	
 POSITIVE
 COVENANTS

 	
  

 	
 38

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 7.1.

 	
  

 	
 Reporting
 Requirements

 	
  

 	
 38

 
	
  

 	
 Section 7.2.

 	
  

 	
 Maintenance
 of Existence; Conduct of Business

 	
  

 	
 40

 
	
  

 	
 Section 7.3.

 	
  

 	
 Maintenance
 of Properties

 	
  

 	
 40

 
	
  

 	
 Section 7.4.

 	
  

 	
 Taxes and
 Claims

 	
  

 	
 40

 
	
  

 	
 Section 7.5.

 	
  

 	
 Insurance

 	
  

 	
 41

 
	
  

 	
 Section 7.6.

 	
  

 	
 Inspection
 Rights

 	
  

 	
 41

 
	
  

 	
 Section 7.7.

 	
  

 	
 Keeping
 Books and Records

 	
  

 	
 41

 
	
  

 	
 Section 7.8.

 	
  

 	
 Compliance
 with Laws

 	
  

 	
 41

 
	
  

 	
 Section 7.9.

 	
  

 	
 Compliance
 with Agreements

 	
  

 	
 41

 
	
  

 	
 Section
 7.10.

 	
  

 	
 ERISA

 	
  

 	
 41

 
	
  

 	
 Section
 7.11.

 	
  

 	
 Additional
 Subsidiaries

 	
  

 	
 41

 
	
  

 	
 Section
 7.12.

 	
  

 	
 Further
 Assurances

 	
  

 	
 42

 
	
  

 	
 Section
 7.13.

 	
  

 	
 Post Closing
 Covenant

 	
  

 	
 42

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE
 VIII.

 	
  

 	
 NEGATIVE
 COVENANTS

 	
  

 	
 42

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 8.1.

 	
  

 	
 Debt

 	
  

 	
 42

 
	
  

 	
 Section 8.2.

 	
  

 	
 Limitation
 on Liens and Restrictions on Subsidiaries

 	
  

 	
 43

 
	
  

 	
 Section 8.3.

 	
  

 	
 Mergers, etc

 	
  

 	
 44

 
	
  

 	
 Section 8.4.

 	
  

 	
 Restrictions
 on Dividends and other Distributions

 	
  

 	
 44

 
	
  

 	
 Section 8.5.

 	
  

 	
 Investments

 	
  

 	
 44

 
	
  

 	
 Section 8.6.

 	
  

 	
 Transactions
 With Affiliates

 	
  

 	
 45

 
	
  

 	
 Section 8.7.

 	
  

 	
 Disposition
 of Assets

 	
  

 	
 45

 
	
  

 	
 Section 8.8.

 	
  

 	
 Lines of
 Business

 	
  

 	
 46

 
	
  

 	
 Section 8.9.

 	
  

 	
 Sale and
 Leaseback

 	
  

 	
 46

 
	
  

 	
 Section
 8.10.

 	
  

 	
 Prepayment
 of Debt

 	
  

 	
 46

 
	
  

 	
 Section
 8.11.

 	
  

 	
 Change in
 Fiscal Year

 	
  

 	
 46

 



TABLE OF CONTENTS, Page ii 









	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX.

 	
  

 	
 FINANCIAL
 COVENANTS

 	
  

 	
 46

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 9.1.

 	
  

 	
 Leverage
 Ratio

 	
  

 	
 46

 
	
  

 	
 Section 9.2.

 	
  

 	
 Fixed Charge
 Coverage Ratio

 	
  

 	
 46

 
	
  

 	
 Section 9.3.

 	
  

 	
 Net Income

 	
  

 	
 47

 
	
  

 	
 Section 9.4.

 	
  

 	
 Capital
 Expenditures

 	
  

 	
 47

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X.

 	
  

 	
 DEFAULT

 	
  

 	
 47

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section
 10.1.

 	
  

 	
 Events of
 Default

 	
  

 	
 47

 
	
  

 	
 Section
 10.2.

 	
  

 	
 Remedies

 	
  

 	
 49

 
	
  

 	
 Section
 10.3.

 	
  

 	
 Performance
 by Agent

 	
  

 	
 50

 
	
  

 	
 Section
 10.4.

 	
  

 	
 Setoff

 	
  

 	
 50

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI.

 	
  

 	
 AGENT

 	
  

 	
 51

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section
 11.1.

 	
  

 	
 Appointment,
 Powers and Immunities

 	
  

 	
 51

 
	
  

 	
 Section
 11.2.

 	
  

 	
 Rights of
 Agent as a Bank

 	
  

 	
 51

 
	
  

 	
 Section
 11.3.

 	
  

 	
 Defaults

 	
  

 	
 51

 
	
  

 	
 Section 11.4.

 	
  

 	
 Indemnification

 	
  

 	
 52

 
	
  

 	
 Section
 11.5.

 	
  

 	
 Independent
 Credit Decisions

 	
  

 	
 52

 
	
  

 	
 Section
 11.6.

 	
  

 	
 Several
 Commitments

 	
  

 	
 53

 
	
  

 	
 Section
 11.7.

 	
  

 	
 Successor
 Agent

 	
  

 	
 53

 
	
  

 	
 Section
 11.8.

 	
  

 	
 Release of
 Collateral

 	
  

 	
 53

 
	
  

 	
 Section
 11.9.

 	
  

 	
 Bank
 Affiliates Rights

 	
  

 	
 53

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XII.

 	
  

 	
 MISCELLANEOUS

 	
  

 	
 54

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section
 12.1.

 	
  

 	
 Expenses

 	
  

 	
 54

 
	
  

 	
 Section
 12.2.

 	
  

 	
 Indemnification

 	
  

 	
 54

 
	
  

 	
 Section
 12.3.

 	
  

 	
 Limitation
 of Liability

 	
  

 	
 55

 
	
  

 	
 Section
 12.4.

 	
  

 	
 No Duty

 	
  

 	
 55

 
	
  

 	
 Section
 12.5.

 	
  

 	
 No Fiduciary
 Relationship

 	
  

 	
 55

 
	
  

 	
 Section
 12.6.

 	
  

 	
 Equitable
 Relief

 	
  

 	
 55

 
	
  

 	
 Section
 12.7.

 	
  

 	
 No Waiver;
 Cumulative Remedies

 	
  

 	
 55

 
	
  

 	
 Section
 12.8.

 	
  

 	
 Successors
 and Assigns

 	
  

 	
 56

 
	
  

 	
 Section
 12.9.

 	
  

 	
 Survival

 	
  

 	
 58

 
	
  

 	
 Section
 12.10.

 	
  

 	
 Entire
 Agreement

 	
  

 	
 58

 
	
  

 	
 Section
 12.11.

 	
  

 	
 Amendments

 	
  

 	
 58

 
	
  

 	
 Section
 12.12.

 	
  

 	
 Maximum
 Interest Rate

 	
  

 	
 59

 
	
  

 	
 Section
 12.13.

 	
  

 	
 Notices

 	
  

 	
 59

 
	
  

 	
 Section
 12.14.

 	
  

 	
 Governing
 Law

 	
  

 	
 60

 
	
  

 	
 Section
 12.15.

 	
  

 	
 Counterparts

 	
  

 	
 60

 
	
  

 	
 Section
 12.16.

 	
  

 	
 Severability

 	
  

 	
 60

 
	
  

 	
 Section
 12.17.

 	
  

 	
 Headings

 	
  

 	
 60

 
	
  

 	
 Section
 12.18.

 	
  

 	
 Construction

 	
  

 	
 60

 
	
  

 	
 Section
 12.19.

 	
  

 	
 Independence
 of Covenants

 	
  

 	
 60

 
	
  

 	
 Section
 12.20.

 	
  

 	
 Waiver of
 Jury Trial

 	
  

 	
 60

 
	
  

 	
 Section
 12.21.

 	
  

 	
 USA PATRIOT
 Act

 	
  

 	
 60

 
	
  

 	
 Section
 12.22.

 	
  

 	
 Confidentiality

 	
  

 	
 61

 



TABLE OF CONTENTS, Page iii 






INDEX TO EXHIBITS AND SCHEDULES


	
  

 	
  

 	
  

 	
  

 
	
 Exhibit

 	
  

 	
 Description
of Exhibit

 	
  

 
	

 


 	
  

 	

 


 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 A

 	
  

 	
 Form of
 Revolving Note

 
	
 B

 	
  

 	
 Form of
 Assignment and Assumption

 
	
 C

 	
  

 	
 Form of
 Compliance Certificate

 
	
 D

 	
  

 	
 Form of
 Letter of Credit Notice

 
	
 E

 	
  

 	
 Form of
 Notice of Borrowing, Conversion, etc.

 






	
  

 	
  

 	
  

 	
  

 
	
 Schedule

 	
  

 	
 Description
of Schedule

 	
  

 
	

 


 	
  

 	

 


 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 1.1

 	
  

 	
 Commitments

 	
  

 
	
 6.14

 	
  

 	
 Subsidiaries

 	
  

 
	
 8.1

 	
  

 	
 Existing
 Debt

 	
  

 
	
 8.2

 	
  

 	
 Existing
 Liens

 	
  

 
	
 8.5

 	
  

 	
 Existing
 Investments

 	
  

 
	
  

 	
  

 	
  

 	
  

 



INDEX TO
EXHIBITS AND SCHEDULES, Solo Page 






CREDIT AGREEMENT


          THIS
CREDIT AGREEMENT (the “Agreement”), dated as of December 16, 2009, is
among UNIVERSAL POWER GROUP, INC., a corporation duly organized and validly
existing under the laws of the State of Texas (“Borrower”), MONARCH
OUTDOOR ADVENTURES, LLC, a limited liability company duly organized and validly
existing under the laws of the State of Texas, each of the banks or other
lending institutions which is or which may from time to time become a party
hereto or any successor or assignee thereof (individually, a “Bank” and,
collectively, the “Banks”), and WELLS FARGO BANK, NATIONAL ASSOCIATION,
individually as a Bank and as agent for itself and the other Banks (in its
capacity as administrative agent, together with its successors in such capacity,
“Agent”). 


R E C I T A L S:


          WHEREAS,
Borrower has requested that the Banks make loans and other financial
accommodations to Borrower in an aggregate amount not to exceed $30,000,000, as
more particularly described herein; and 


          WHEREAS,
the Banks have agreed to make such loans and other financial accommodations to
Borrower on the terms and conditions contained herein. 


          NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the parties hereto hereby agree as follows: 


ARTICLE I.


Definitions


          Section
1.1. Definitions. As used in this Agreement, the following terms have
the following meanings: 


          “Act”
has the meaning specified in Section 12.21. 


          “Adjusted
Eurodollar Rate” means, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the Eurodollar Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate. 


          “Administrative
Questionnaire” means a questionnaire in a form supplied by the Agent. 


          “Affiliate”
means, as to any Person, any other Person (a) that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, such Person; (b) that directly or indirectly beneficially
owns or holds ten percent (10%) or more of any class of voting Equity Interests
of such Person; or (c) ten percent (10%) or more of the voting Equity Interests
of which is directly or indirectly beneficially owned or held by the Person in
question. The term “control” means the possession, directly or
indirectly, of the power to direct or cause direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise; provided, however, in no event shall
Agent or any Bank be deemed an Affiliate of Borrower or any Subsidiaries. 


          “Agent”
has the meaning set forth in the introductory paragraph of this Agreement. 


          “Agreement”
has the meaning set forth in the introductory paragraph of this Agreement. 


CREDIT
AGREEMENT, Page 1 





          “Applicable
Lending Office” means for each Bank, the lending office of such Bank (or of
an Affiliate of such Bank) designated below its name on the signature pages
hereof or such other office of such Bank (or of an Affiliate of such Bank) as
such Bank may from time to time specify to Borrower and Agent as the office by
which its Loans are to be made and maintained; provided that such office must
be located in the United States of America. 


          “Applicable
Margin” means the percentage per annum set forth in the table below for
Base Rate Loans for the particular type of Base Rate Loan, Commitment Fees and
Eurodollar Loans that corresponds to the Leverage Ratio in effect at such date
of determination. 


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Level

 	
  

 	
 Leverage

 Ratio

 	
  

 	
 Eurodollar

 Loans

 	
  

 	
 Base Rate Loans

 	
  

 	
 Commitment Fees

 
	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 	
  

 	

 


 
	
 I

 	
  

 	
 Less than 1.50 to 1.00

 	
  

 	
 2.25%

 	
  

 	
 1.25%

 	
  

 	
 0.250%

 
	
 II

 	
  

 	
 Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00

 	
  

 	
 2.50%

 	
  

 	
 1.50%

 	
  

 	
 0.250%

 
	
 III

 	
  

 	
 Greater than or equal to 2.00 to 1.00

 	
  

 	
 2.75%

 	
  

 	
 1.75%

 	
  

 	
 0.250%

 



Until the
financial statements and corresponding Compliance Certificate are required to
be delivered to Agent for the fiscal quarter ended December 31, 2009 pursuant
to Section 7.01(b) and 7.1(c), margins shall be determined as if
Level II were applicable. Thereafter, the margins shall be subject to increase
or decrease upon receipt by Agent of the financial statements and corresponding
Compliance Certificate for the last fiscal quarter, which change shall be
effective on the fifth Business Day following the earlier to occur of (a)
receipt of the such financial statements or (b) the date such financial
statements were required to be delivered pursuant to Section 7.1(b) for
a fiscal month end coinciding with a fiscal quarter end. If the financial
statements required by Section 7.1(b) and the corresponding Compliance
Certificate are not delivered within the time frame dictated by Section 7.1
then, at the option of Agent, the margins shall be determined as if Level III
were applicable, from such day until the first day following actual receipt. 


          “Approved
Fund” has the meaning set forth in Section 12.8. 


          “Assignment
and Assumption” means an Assignment and Assumption entered into by a Bank
and its assignee and accepted by Agent pursuant to Section 12.8, in
substantially the form of Exhibit B. 


          “Bank”
has the meaning set forth in the introductory paragraph of this Agreement.
References herein to a Bank or Banks may include the Swingline Bank as the
context requires. 


          “Bankruptcy
Code” has the meaning specified in Section 10.1(e). 


          “Base
Rate” means, for any day of determination, a per annum rate equal to the
greatest of: (a) the Prime Rate for such day, (b) the Federal Funds Effective
Rate for such day plus one and
one-half percent (1.50%), and (c) the Adjusted Eurodollar Rate for an Interest
Period of one month as determined on such day plus
one and one-half percent (1.50%). 


          “Base
Rate Loan” means a Revolving Loan accruing interest at the Base Rate plus the Applicable Margin. 


CREDIT AGREEMENT, Page 2 





          “Borrower”
has the meaning specified in the introductory paragraph of this Agreement. 


          “Borrowing
Base” means, as of any date of determination, the sum of the following:


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 eighty
 percent (80.0%) of Borrower’s Eligible Accounts; plus

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 fifty
 percent (50.0%) of Borrower’s Eligible Inventory; minus

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any reserves
 established by Agent in its reasonable discretion. 

 



          “Borrowing
Base Party” means each of Borrower and, if (but only if) and so long as
such entity is a direct, wholly-owned Subsidiary of Borrower, Monarch Outdoor
Adventures, LLC. 


          “Business
Day” means any day excluding Saturday, Sunday, and any day which either is
a legal holiday under the laws of the State of Texas or is a day on which
banking institutions located in the State of Texas are closed. 


          “Capital
Expenditures” means, for any period and a Person, (a) the additions to
property, plant and equipment and other capital expenditures of such Person and
its consolidated subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of such Person for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations incurred by such Person and its
consolidated subsidiaries during such period. 


          “Capital
Lease Obligations” means, as to any Person, the obligations of such Person
to pay rent or other amounts under a lease of (or other agreement conveying the
right to use) real and/or personal property, which obligations are required to
be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP. For purposes of this Agreement, the amount of such Capital
Lease Obligations shall be the capitalized amount thereof, determined in
accordance with GAAP. 


          “Change
of Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof), of Equity Interests
representing more than 51% of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests of Borrower; (b) the occupation
of a majority of the seats (other than vacant seats) on the board of directors
of Borrower by Persons who were neither (i) nominated by the board of directors
of Borrower nor (ii) appointed by directors so nominated; or (c) the
acquisition of direct or indirect control of Borrower by any Person or group. 


          “Closing
Date” means December 16, 2009. 


          “Code”
means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated and rulings issued thereunder. 


          “Collateral”
means the property in which Liens have been granted in favor of Agent, for the benefit
of the Banks, pursuant to the Security Agreement, or any other Loan Document,
whether such Liens are now existing or hereafter arise. 


          “Commitment
Fees” has the meaning specified in Section 2.4. 


          “Commitment
Percentage” means, as to any Bank, the percentage equivalent of a fraction,
the numerator of which is the amount of the Commitments of such Bank and the
denominator of which is the aggregate amount of the Commitments of all of the
Banks; provided that if all Commitments have 


CREDIT AGREEMENT, Page 3 





terminated,
such percentage shall be determined based on the outstanding principal amount
of the Loans and direct or participation interest in the Letters of Credit and
Swingline Loans. 


          “Commitments”
means the Revolving Commitments and, except when calculating the Commitment
Percentage with respect to the Swingline Bank only, the Swingline Commitment. 


          “Compliance
Certificate” means a certificate in substantially the form of Exhibit C
properly completed and executed by the chief financial officer or other
Responsible Officer of Borrower. 


          “Confidential
Information” has the meaning specified in Section 12.22. 


          “Continue”,
“Continuation”, and “Continued” shall refer to the continuation
pursuant to Section 3.4 of a Eurodollar Loan from one Interest Period to
the next Interest Period. 


          “Consolidated
Net Income” means, for any period, net income (excluding extraordinary
items) of Borrower and its Subsidiaries on a consolidated basis, as determined
in accordance with GAAP. 


          “Contract
Rate” has the meaning specified in Section 12.12(a). 


          “Debt”
means as to any Person at any time (without duplication): (a) all obligations
of such Person for borrowed money; (b) all obligations of such Person evidenced
by bonds, notes, debentures, or other similar instruments; (c) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable of such Person arising in the ordinary course of
business that are not past due by more than ninety (90) days or that are past
due by more than ninety (90) days but are being contested in good faith by
appropriate proceedings diligently pursued; (d) all Capital Lease Obligations
of such Person; (e) all Debt of others Guaranteed by such Person; (f) all
obligations secured by a Lien existing on property owned by such Person,
whether or not the obligations secured thereby have been assumed by such Person
or are non-recourse to the credit of such Person; (g) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers’ acceptances, surety or other bonds, and similar
instruments; (h) all liabilities of such Person in respect of all unfunded vested
benefits under any Plan; (i) all obligations of such Person in respect of
mandatory redemption or mandatory dividend rights on Equity Interest (or other
equity); (j) all obligations of such Person, contingent or otherwise, for the
payment of money under any non-compete, consulting, performance based or
similar agreement entered into with the seller of any assets or equity
interests or any other similar arrangements providing for the deferred payment
of the purchase price for an acquisition permitted hereby or an acquisition
consummated prior to the date hereof, in each case to the extent reflected as a
liability on the balance sheet of a Person in accordance with GAAP; (k) all
obligations of such Person under any Hedging Agreement; (l) all obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which lease is required or is permitted to be classified
and accounted for as an operating lease under GAAP but which is intended by the
parties thereto for tax, bankruptcy, regulatory, commercial law, real estate
law and all other purposes as a financing arrangement (sometimes known as a
synthetic lease); and (m) any other amounts which are required to be reflected
as a liability on the balance sheet of a Person in accordance with GAAP,
excluding trade accounts payable excluded from Debt pursuant to clause (c)
of this definition, accruals, deferred credits, and loss contingencies. The
amount of the obligations in respect of any Hedging Agreement shall, at any
time of determination and for all purposes under this Agreement, be the maximum
aggregate amount (giving effect to any netting agreements) that would be
required to be paid if such Hedging Agreement were terminated at such time
giving effect to current market conditions notwithstanding any contrary
treatment in accordance with GAAP. 


          “Default”
means an Event of Default or the occurrence of an event or condition which with
notice or lapse of time or both would become an Event of Default. 


CREDIT AGREEMENT, Page 4 





          “Default
Rate” means a rate per annum equal to the sum of two percent (2%) plus the interest rate otherwise
applicable thereto. 


          “Defaulting
Bank” means any Bank, as determined by the Agent, that has (a) failed to
fund any portion of its Loans or participations in Letters of Credit or
Swingline Loans within three Business Days of the date required to be funded by
it hereunder, (b) notified Borrower, the Agent, the Issuing Bank, the Swingline
Bank or any Bank in writing that it does not intend to comply with any of its
funding obligations under this Agreement or has made a public statement to the
effect that it does not intend to comply with its funding obligations under
this Agreement or under other agreements in which it commits to extend credit,
(c) failed, within three Business Days after request by the Agent, to confirm
that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Loans and participations in then outstanding
Letters of Credit and Swingline Loans, (d) otherwise failed to pay over to the
Agent or any other Bank any other amount required to be paid by it hereunder
within three Business Days of the date when due, unless the subject of a good
faith dispute, or (e) (i) become or is insolvent or has a parent company that
has become or is insolvent or (ii) become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment
or has a parent company that has become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment. 


          “Defaulting
Bank Rate” means the interest rate then applicable to the Base Rate Loans. 


          “Deposit
Obligations” means all indebtedness, liabilities, obligations, covenants
and duties of Borrower or any other Obligated Party to any Secured Party, of
every kind, nature and description arising under or in respect of any deposit,
lockbox or other cash management arrangement of such Person with such Secured
Party, whether direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated. 


          “Disbursement
Account” has the meaning specified in Section 4.1. 


          “Dollars”
and “$” mean lawful money of the United States of America. 


          “Domestic
Subsidiary” means any Subsidiary that is organized and existing under the
laws of the United States or any state or commonwealth thereof or under the
laws of the District of Columbia. 


          “Eligible
Accounts” means and consist solely of trade accounts created in the
ordinary course of a Borrowing Base Party’s business, upon which such Borrowing
Base Party’s right to receive payment is absolute and not contingent upon the
fulfillment of any condition whatsoever, and in which Agent has a perfected
security interest of first priority, and shall not include: 


                    (i)
any account which is unpaid more than ninety (90) days past the initial invoice
date therefor; 


                    (ii)
that portion of any account for which there exists any right of setoff, defense
or discount (except regular discounts allowed in the ordinary course of
business to promote prompt payment) or for which any defense or counterclaim
has been asserted; 


                    (iii)
any account which represents an obligation of any state or municipal government
or of the United States government or any political subdivision thereof (except
accounts which represent obligations of the United States government and for
which the assignment provisions of the Federal 


CREDIT AGREEMENT, Page 5 





Assignment of
Claims Act, as amended or recodified from time to time, have been complied with
to Agent’s satisfaction); 


                    (iv)
any account which represents an obligation of an account debtor located in a
country other than Canada or the United States of America, except to the extent
any such account, in Agent’s determination, is supported by a letter of credit,
insured under a policy of foreign credit insurance, or a guaranty issued by the
Export-Import Bank, in each case in form, substance and issued by a party
acceptable to Agent; 


                    (v)
any account which arises from the sale or lease to or performance of services
for, or represents an obligation of, an employee, affiliate, partner, member,
parent or subsidiary of such Borrowing Base Party; 


                    (vi)
that portion of any account which represents interim or progress billings or
retention rights on the part of the account debtor; 


                    (vii)
any account which represents an obligation of any account debtor when
twenty-five percent (25%) or more of such Borrowing Base Party’s accounts from
such account debtor are not eligible pursuant to clause (i) above; 


                    (viii)
which is owed by an account debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
of its assets, (ii) has had possession of all or a material part of its
property taken by any receiver, custodian, trustee or liquidator, (iii) filed,
or had filed against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal bankruptcy laws and
such proceeding has not been dismissed, (iv) has admitted in writing its
inability, or is generally unable to, pay its debts as they become due, (v)
become insolvent, or (vi) ceased operation of its business; 


                    (ix)
that portion of any account from (A) Brinks Home Security Holdings, Inc. which
represents the amount by which such Borrowing Base Party’s total accounts from
Brinks Home Security Holdings, Inc. exceeds
forty percent (40%) of such Borrowing Base Party’s total accounts or (B) any
other account debtor which represents the amount by which such Borrowing Base
Party’s total accounts from said account debtor exceeds twenty percent (20%) of
such Borrowing Base Party’s total accounts; 


                    (x)
which was created on cash on delivery terms or is chargeable to a credit card
of such account debtor; or 


                    (xi)
any account, or portion thereof, otherwise deemed ineligible by Agent in its
sole discretion. 


          “Eligible
Assignee” means, with respect to any assignment of the rights, interest and
obligations of a Bank hereunder, a Person that is at the time of such
assignment (a) a commercial bank organized under the laws of the United States
of America or any state thereof, having combined capital and surplus in excess
of $500,000,000, (b) a commercial bank organized under the laws of any other country
that is a member of the Organization of Economic Cooperation and Development,
or a political subdivision of any such country, having combined capital and
surplus in excess of $500,000,000, (c) already a Bank hereunder (whether as an
original party to this Agreement or as the assignee of another Bank), (d) the
successor (whether by transfer of assets, merger or otherwise) to all or
substantially all of the commercial lending business of the assigning Bank, (e)
any Affiliate of the assigning Bank, (f) any Approved Fund or (g) any other
Person that has been approved in writing as an Eligible Assignee by the Agent
and, except after the 


CREDIT AGREEMENT, Page 6 





occurrence and
during the continuance of any Default or Event of Default, the Borrower; provided,
however, in no case shall an Affiliate of any Obligated Party constitute an
“Eligible Assignee”. 


          “Eligible
Inventory” means all Inventory of a Borrowing Base Party, valued at the
lower of cost or market determined in accordance with GAAP, but excluding any
Inventory having any of the following characteristics: 


                    (i)
Inventory that is: in-transit; located at any warehouse, job site or other
premises not approved by Agent in writing; not subject to a duly perfected
first priority security interest in Agent’s favor; covered by any negotiable or
non-negotiable warehouse receipt, bill of lading or other document of title; on
consignment from any Person; or on consignment to any Person or subject to any
bailment unless such consignee or bailee has executed a satisfactory agreement
with Agent; 


                    (ii)
supplies, packaging, parts or sample Inventory, or customer supplied parts or
Inventory; 


                    (iii)
work-in-process Inventory; 


                    (iv)
Inventory that is damaged, defective, discontinued, obsolete, rejected, slow
moving or not currently saleable in the normal course of such Borrowing Base
Party’s operations, or the amount of such Inventory that has been reduced by
shrinkage; 


                    (v)
Inventory that has been held by such Borrowing Base Party for more than twelve
(12) months; 


                    (vi)
Inventory that such Borrowing Base Party has returned, has attempted to return,
is in the process of returning or intends to return to the vendor thereof; 


                    (vii)
Inventory that is perishable or live; 


                    (viii)
Inventory manufactured by such Borrowing Base Party pursuant to a license
unless the applicable licensor has agreed in writing to permit Agent to
exercise its rights and remedies against such Inventory; 


                    (ix)
Inventory that is subject to a security interest, lien or encumbrance in favor
of any Person other than Agent; 


                    (x)
 Inventory stored at locations
holding less than ten percent (10%) of the aggregate value of such Borrowing
Base Party’s Inventory; 


                    (xi)
Inventory that consists of fabricated parts; 


                    (xii)
Inventory that is located in any location leased by such Borrowing Base Party
unless (A) the lessor has delivered a subordination agreement acceptable to
Agent in its sole discretion or (B) Agent has established and implemented in
its sole discretion a reserve from the Borrowing Base for rent, charges and other
amounts due or to become due with respect to such location; or 


                    (xiii)
Inventory otherwise deemed ineligible by Agent in its sole discretion. 


          “Environmental
Laws” means any and all federal, state, and local laws, regulations, and
requirements pertaining to protection of occupational health or safety, or
protection of the environment, as such laws, regulations, and requirements may
be amended or supplemented from time to time. 


CREDIT
AGREEMENT, Page 7 






          “Environmental
Liabilities” means, as to any Person, all liabilities, obligations,
responsibilities, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs, and expenses (including, without
limitation, all reasonable fees, disbursements and expenses of counsel, expert
and consulting fees and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any Environmental Law,
permit, order, or agreement with any Governmental Authority or other Person,
arising under Environmental Laws or arising from the Release or threatened
Release of a Hazardous Material into the environment. 


          “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations and published interpretations thereunder. 


          “ERISA
Affiliate” means any corporation or trade or business which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the Code) as Borrower or is under common control (within the meaning of
Section 414(c) of the Code) with Borrower. 


          “Equity
Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a Person, and any warrants, options or
other rights entitling the holder thereof to purchase or acquire any such
equity interest. 


          “Eurodollar
Loan” means a Revolving Loan accruing interest at the Adjusted Eurodollar
Rate plus the Applicable Margin. 


          “Eurodollar
Rate” means, with respect to any Eurodollar Loan for any Interest Period,
the rate (rounded upwards, if necessary, to the next 1/16 of 1%) appearing on
Rueters Screen LIBOR01 Page (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, on the date of the commencement of
such Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available
at such time for any reason, then the “Eurodollar Rate” with respect to such
Eurodollar Loan for such Interest Period shall be the rate (rounded upwards, if
necessary, to the next 1/16 of 1%) at which dollar deposits of $5,000,000 and
for a maturity comparable to such Interest Period are offered by the principal
London office of Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, on the date of the
commencement of such Interest Period. If at any time the London Interbank
Offered Rate becomes unavailable, then the Prime Rate offered by Agent shall be
substituted for the Eurodollar Rate. 


          “Event
of Default” has the meaning specified in Section 10.1. 


          “Federal
Funds Effective Rate” means, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as released on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so released for any day which is a Business Day, the arithmetic average
(rounded upwards to the next 1/100th of 1%), as determined by Agent, of the
quotations for the day of such transactions received by Agent from three federal
funds brokers of recognized standing selected by it. 


          “Foreign
Subsidiary” means any Subsidiary that is not a Domestic Subsidiary. 


          “Fully
Satisfied” means, as of any date: 


CREDIT AGREEMENT, Page 8 









	
  

 	
  

 
	
  

 	
           (a)
 with respect to the Loan Obligations, that, on or before such date: (i) the
 principal of and interest accrued to such date on such Loan Obligations
 (other than contingent indemnity obligations and expense reimbursement
 obligations not yet due and payable (other than contingent Loan Obligations
 of Borrower to reimburse the Issuing Bank in respect of the then undrawn and
 unexpired portions of any outstanding Letters of Credit (the “Undrawn
 Letter of Credit Obligations”)) shall have been paid in full in cash,
 (ii) all fees, expenses and other amounts then due and payable which
 constitute Loan Obligations (other than contingent indemnity obligations and
 expense reimbursement obligations not yet due and payable other than the
 Undrawn Letter of Credit Obligations) shall have been paid in full in cash,
 (iii) the Commitments shall have expired or irrevocably been terminated, and
 (iv) the Undrawn Letter of Credit Obligations shall have been secured by the
 grant of a first priority, perfected Lien on: (x) cash or cash equivalents in
 an amount at least equal to one hundred five percent (105%) of the amount of
 such Undrawn Letter of Credit Obligations or (y) other collateral which is
 acceptable to the Issuing Bank and the Agent; and 

 
	
  

 	
  

 
	
  

 	
           (b)
 with respect to the Hedging Obligations, that, on or before such date: (i)
 all termination payments, fees, expenses and other amounts then due and
 payable under the related Hedging Agreements which constitute Hedging
 Obligations (other than contingent indemnity obligations and expense reimbursement
 obligations not yet due and payable) shall have been paid in full in cash;
 and (ii) all contingent amounts which could be payable under the related
 Hedging Agreements shall have been secured by the grant of a first priority,
 perfected Lien on: (x) cash or cash equivalents in an amount at least equal
 to one hundred five percent (105%) of the amount of such contingent Hedging
 Obligations (other than contingent indemnity obligations) or (y) other
 collateral which is acceptable to the Bank or Affiliate of a Bank holding the
 applicable Hedging Obligations and the Agent. 

 



          “GAAP”
means generally accepted accounting principles, applied on a consistent basis,
as set forth in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board and/or their respective successors and which are
applicable in the circumstances as of the date in question. Accounting
principles are applied on a “consistent basis” when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period. 


          “Governmental
Authority” means any nation or government, any state or political
subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government. 


          “Guarantee”
by any Person means any obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (a) to purchase or
pay (or advance or supply funds for the purchase or payment of) such Debt or
other obligation (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part); provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business. The term “Guarantee” used as a verb has a
corresponding meaning. The amount of any Guarantee shall be equal to the amount
of the obligations so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed. 


CREDIT AGREEMENT, Page 9 





          “Guarantor”
means any Person who from time to time guarantees all or any part of the
Obligations. As of the Closing Date, the Guarantors are Monarch Outdoor
Adventures, LLC, Universal Battery Corporation and University Mobility, Inc. 


          “Guaranty”
means that certain Guaranty Agreement executed by each Guarantor in favor of
Agent and the other Secured Parties, as the same may hereafter be amended or
otherwise modified in accordance with the terms thereof. 


          “Hazardous
Material” means any substance, product, waste, pollutant, material,
chemical, contaminant, constituent, or other material which is or becomes
listed, or regulated under any Environmental Law. 


          “Hedging
Agreement” means any interest rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement, security hedging
agreement, other interest, currency or security exchange rate or commodity
price hedging arrangement or other agreements enabling Borrower or any other
Obligated Party to fix or limit its interest expense or manage the market risk
of holding currencies or securities in the cash market, any other synthetic
purchase agreement, or any other derivative instrument. 


          “Hedging
Obligations” means all obligations, indebtedness, and liabilities of
Borrower and any other Obligated Party to any Secured Party, arising pursuant to
any Hedging Agreements entered into by such Secured Party with Borrower or such
Obligated Party enabling Borrower or such Obligated Party to fix or limit its
interest expense or manage the market risk of holding currencies, securities or
commodities in the cash market, whether now existing or hereafter arising,
whether direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including all fees, costs,
and expenses (including attorneys’ fees and expenses) provided for in such
Hedging Agreements. 


          “Interest
Period” means, with respect to any Eurodollar Loan, the period commencing
on the date of such Loan and ending on the numerically corresponding day in the
fiscal month that is one or three months, as Borrower may elect; provided,
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day,
unless such next succeeding Business Day would fall in the next month, in which
case such Interest Period shall end on the next preceding Business Day, and (b)
any Interest Period pertaining to a Eurodollar Loan that commences on the last
Business Day of a month (or on a day for which there is no numerically corresponding
day in the last month of such Interest Period) shall end on the last Business
Day of the last month of such Interest Period. For purposes hereof, the date of
a Loan initially shall be the date on which such Loan is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Loan. 


          “Investments”
has the meaning specified in Section 8.5.


          “Issuing
Bank” means Wells Fargo, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.7(i).
The Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of the Issuing Bank, in which case the term
“Issuing Bank” shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate. 


          “LC
Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit. 


          “LC
Exposure” means, at any time, the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time, plus (b) the aggregate amount of all LC Disbursements that
have not yet been reimbursed by or on behalf of Borrower at such time. The LC
Exposure of any Bank at any time shall be its Commitment Percentage of the
total LC Exposure at such time. 


CREDIT AGREEMENT, Page 10 





          “Letter
of Credit” means any letter of credit issued pursuant to this Agreement. 


          “Letter
of Credit Notice” has the meaning set forth in Section 2.7(b). 


          “Leverage
Ratio” means the ratio of Total Liabilities to Tangible Net Worth of
Borrower and its Subsidiaries calculated in accordance with Section 9.1
as of any date of determination. 


          “Lien”
means any lien, mortgage, security interest, tax lien, financing statement,
pledge, charge, hypothecation, assignment, preference, priority, or other
encumbrance of any kind or nature whatsoever (including, without limitation,
any conditional sale or title retention agreement), whether arising by contract,
operation of law, or otherwise. 


          “Loan
Documents” means this Agreement, the Letters of Credit, the Note, the
Security Agreement, each Guaranty, and all other promissory notes, security
agreements, deeds of trust, assignments, guaranties, letters of credit,
applications and agreements for Letters of Credit, and other instruments,
agreements, and other documentation (other than Hedging Agreements and
agreements relating to Deposit Obligations) executed and delivered pursuant to
or in connection with this Agreement, as all such instruments, agreements, and
other documentation may be amended or otherwise modified in accordance with the
terms thereof. 


          “Loan
Obligations” means all obligations, indebtedness, and liabilities of
Borrower and any other Obligated Party to Agent and the Banks arising pursuant
to any of the Loan Documents, whether now existing or hereafter arising,
whether direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including, without
limitation, the obligation of Borrower to repay the Loans, the LC
Disbursements, interest on the Loans and LC Disbursements, and all fees, costs,
and expenses (including attorneys’ fees and expenses) provided for in the Loan Documents.



          “Loans”
means the Revolving Loans and Swingline Loans. 


          “Material
Adverse Effect” the effect of any event or circumstance that, taken alone
or in conjunction with other events or circumstances, (a) has or could be
reasonably expected to have a material adverse effect on the business,
operations, properties, prospects or condition (financial or otherwise) of any
Obligated Party, on the value of any material Collateral, on the enforceability
of any Loan Documents, or on the validity or priority of Agent’s Liens on any
Collateral; (b) impairs the ability of any Obligated Party to perform any
obligations under the Loan Documents, including repayment of any Obligations;
or (c) otherwise impairs the ability of Agent to enforce or collect any
Obligations or to realize upon any Collateral. 


          “Maximum
Rate” means the maximum rate of non-usurious interest permitted by
applicable laws. 


          “Multiemployer
Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA
to which contributions are required to be made by Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA. 


          “Net
Proceeds” means, with respect to any event (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non–cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or
similar event, condemnation awards and similar payments net of (b) the sum of
(i) all reasonable fees and out–of–pocket expenses paid by Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, including any sales commissions, investment banking fees, or
underwriting discounts, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to 


CREDIT AGREEMENT, Page 11 





be made by
Borrower and the Subsidiaries as a result of such event to repay Debt (other
than Loans) secured by such asset or otherwise subject to mandatory prepayment
as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by Borrower and the Subsidiaries, and the
amount of any reserves established by Borrower and the Subsidiaries to fund
contingent liabilities reasonably estimated to be payable, (A) in the case of
taxes, during the year that such event occurred or the next succeeding year and
that are directly attributable to such event (as determined reasonably and in
good faith by the chief financial officer of Borrower) and (B) in the case of
reserves for contingent liabilities, during the period of any contractual
indemnification obligation or statute of limitation imposed upon Borrower or
any of its Subsidiaries. 


          “Obligated
Parties” means Borrower and the Guarantors. 


          “Obligations”
means all Loan Obligations, Hedging Obligations, and Deposit Obligations. 


          “Origination
Fee” means that certain non-refundable fee of $25,000 payable to Agent for
its sole account on the Closing Date. 


          “Payor”
has the meaning specified in Section 4.8. 


          “PBGC”
means the Pension Benefit Guaranty Corporation or any entity succeeding to all
or any of its functions under ERISA. 


          “Person”
means any individual, corporation, business trust, association, company,
partnership, joint venture, Governmental Authority, or other entity. 


          “Plan”
means any employee benefit plan established or maintained by Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA. 


          “Prepayment
Event” means: 


                    (a)
any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any asset of Borrower or
any Domestic Subsidiary; 


                    (b)
any sale, transfer or other disposition of assets (including pursuant to a sale
leaseback transaction) of Borrower or any Domestic Subsidiaries under Section
8.7(e) or with the consent of the Required Banks; and 


                    (c)
the incurrence of by Borrower or any Domestic Subsidiary of any Debt other than
Debt permitted under Section 8.1. 


          “Prime
Rate” means the rate of interest per annum publicly announced from time to
time by Wells Fargo Bank, National Association as its prime rate in effect at
its principal office in San Francisco, California; each change in the Prime
Rate shall be effective from and including the date such change is publicly
announced as being effective. 


          “Principal
Office” means the principal office of Agent located at Wells Fargo Bank,
National Association, 4975 Preston Park Blvd. - Suite 280, Plano, Texas 75093. 


          “Prohibited
Transaction” means any transaction set forth in Section 406 or 407 of ERISA
or Section 4975(c)(1) of the Code for which there does not exist a statutory or
administrative exemption. 


          “Quarterly
Payment Date” means the first Business Day of each fiscal quarter of
Borrower beginning January 1, 2010. 


CREDIT AGREEMENT, Page 12 





          “Regulation
D” means Regulation D of the Board of Governors of the Federal Reserve
System as the same may be amended or supplemented from time to time. 


          “Regulatory
Change” means, with respect to any Bank or the Issuing Bank, any change
after the Closing Date in United States federal, state, or foreign laws or
regulations (including Regulation D) or the adoption or making after the
Closing Date of any interpretations, directives, or requests applying to a
class of banks including such Bank or the Issuing Bank of or under any United
States federal or state, or any foreign, laws or regulations (whether or not
having the force of law) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof. 


          “Release”
means, as to any Person, any release, spill, emission, leaking, pumping,
injection, deposit, disposal, disbursement, leaching, or migration of Hazardous
Materials into the indoor or outdoor environment or into or out of property
owned by such Person, including, without limitation, the uncontained movement
of Hazardous Materials through or in the air, soil, surface water, ground
water, or property in violation of Environmental Laws. 


          “Remedial
Action” means all actions required to (a) cleanup, remove, treat, or
otherwise address Hazardous Materials in the indoor or outdoor environment, (b)
prevent the Release or threat of Release or minimize the further Release of
Hazardous Materials so that they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment, or (c)
perform pre-remedial studies and investigations and post-remedial monitoring
and care. 


          “Required
Banks” means the Banks having (a) no less than fifty-one percent (51%) of
the sum of the Revolving Commitments or (b) if all Revolving Commitments have
terminated, no less than fifty-one percent (51%) of the sum of the total
outstanding Loans and direct or participation interest in the Letters of Credit
and Swingline Loans. 


          “Required
Payment” has the meaning specified in Section 4.8. 


          “Reportable
Event” means any of the events set forth in Section 4043 of ERISA for which
the applicable regulations do not waive the notice requirement. 


          “Responsible
Officer” means the president, chief executive officer, or chief financial
officer of Borrower. 


          “Revolving
Commitment” means, as to each Bank, the obligation of such Bank to make
advances of funds and to acquire participations in Letters of Credit and
Swingline Loans hereunder, as such commitment may be reduced or terminated
pursuant to Section 4.4(b) or 10.2 or increased pursuant to
Section 2.10. The amount of each Bank’s Revolving Commitment is set
forth opposite the name of such Bank on Schedule 1.1 hereto under the
heading “Revolving Commitment” or in the Assignment and Assumption pursuant to
which such Bank shall have assumed its Revolving Commitment, as applicable. The
aggregate amount of the Revolving Commitments of all Banks as of the Closing
Date is equal to Thirty Million Dollars ($30,000,000). 


          “Revolving
Exposure” means, with respect to any Bank at any time, the sum of the
outstanding principal amount of such Bank’s Revolving Loans, its LC Exposure
and its participation interests in the Swingline Loans (or, if determined with
respect to a Bank who is the Issuing Bank, its direct interests in outstanding
Letters of Credit less all other Banks’ participation interests therein whether
or not notice of any such participation shall have been given). 


          “Revolving
Loans” means, as to any Bank, the advances made by such Bank pursuant to Section
2.1. 


CREDIT AGREEMENT, Page 13 





          “Revolving
Notes” means the promissory notes provided for by Section 2.2 and
all amendments or other modifications thereof. 


          “Revolving
Termination Date” means July 30, 2013 or such earlier date on which the
Revolving Commitments terminate as provided in this Agreement. 


          “Secured
Parties” means Agent, the Banks, the Issuing Bank, Affiliates of the Banks
that are owed any of the Obligations, and Successor Bank Affiliates. 


          “Security
Agreement” means the Security Agreement dated as of December 16, 2010
executed by Borrower and the Guarantors and Agent, as the same has otherwise
been and may hereafter be amended or otherwise modified in accordance with the
terms thereof. 


          “Statutory
Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus
the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board of Governors of the Federal Reserve System of the United States of
America to which the Agent is subject with respect to the Adjusted Eurodollar
Rate for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Bank under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage. 


          “Subsidiary”
means any corporation (or other entity) of which at least a majority of the
outstanding shares of stock (or other ownership interests) having by the terms
thereof ordinary voting power to elect a majority of the board of directors (or
similar governing body) of such corporation (or other entity) (irrespective of
whether or not at the time stock (or other ownership interests) of any other
class or classes of such corporation (or other entity) shall have or might have
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by Borrower or one or more of the
Subsidiaries or by Borrower and one or more of the Subsidiaries. 


          “Subsidiary
Joinder Agreement” means an agreement which has been or will be executed by
a Subsidiary as required hereby adding it as a party to the Security Agreement.



          “Successor
Bank Affiliate” means any Person that (a) is owed Hedging Obligations from
one or more Obligated Parties pursuant to a Hedging Agreement entered into with
one or more Obligated Parties at a time when such Person was an Affiliate of a
Bank but such “Bank” subsequently ceased to be a Bank hereunder, and (b) has
provided Agent written notice of its intention to remain a Secured Party. 


          “Swingline
Bank” means Wells Fargo Bank, N.A., in its capacity as Bank of the
Swingline Loans hereunder. 


          “Swingline
Commitment” means the obligation of the Swingline Bank to make advances
pursuant to Section 2.8 in an aggregate principal amount at any one time
outstanding up to but not exceeding Zero Dollars ($0.00). For clarification
purposes, as of the Closing Date, the Swingline Bank has no commitment to
advance Swingline Loans. 


          “Swingline
Exposure” means, at any time, the sum of the aggregate undrawn amount of
all outstanding Swingline Loans at such time. The Swingline Exposure of any
Bank at any time shall be its Commitment Percentage of the total Swingline
Exposure at such time. 


CREDIT AGREEMENT, Page 14 





          “Swingline
Loans” means the advances (if any) made by the Swingline Bank pursuant to Section
2.8. 


          “Swingline
Maturity” has the meaning specified in Section 2.8(b). 


          “Tangible
Net Worth” has the meaning specified in Section 9.1. 


          “Total
Liabilities” has the meaning specified in Section 9.1. 


          “UCC”
means the Uniform Commercial Code as in effect from time to time in the State
of Texas. 


          “Wells
Fargo” means Wells Fargo Bank, National Association. 


          Section
1.2. Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms
defined. The words “hereof”, “herein”, and “hereunder”, and words of similar
import referring to this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement. Unless otherwise specified, all
Article and Section references pertain to this Agreement. Terms used herein
that are defined in the UCC, unless otherwise defined herein, shall have the
meanings specified in the UCC. 


          Section
1.3. Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to Agent and the Banks hereunder shall be prepared, in
accordance with GAAP, on a basis consistent with those used in the preparation
of the financial statements referred to in Section 6.2 hereof. All
calculations made for the purposes of determining compliance with the
provisions of this Agreement shall be made by application of GAAP, on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 6.2 hereof. To enable the ready and consistent
determination of compliance by Borrower with its obligations under this
Agreement, Borrower will not change the manner in which either the last day of
its fiscal year or the last days of the first three fiscal quarters of its
fiscal year is calculated without the consent of Agent. In the event any
changes in accounting principles required by GAAP or recommended by Borrower’s
certified accountants and implemented by Borrower occur and such changes result
in a change in the method of the calculation of financial covenants, standards,
or terms under this Agreement, then Borrower, Agent, and the Banks agree to
enter into good faith negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such changes with the desired result that
the criteria for evaluating such covenants, standards, or terms shall be the
same after such changes as if such changes had not been made. Until such time
as such an amendment shall have been executed and delivered by Agent, Borrower,
and the Banks, all financial covenants, standards, and terms in this Agreement
shall continue to be calculated or construed as if such changes had not
occurred. 


          Section
1.4. Time of Day. Unless otherwise indicated, all references in this
Agreement to times of day shall be references to Dallas, Texas time. 


ARTICLE II.


Revolving Loans and Letters of Credit


          Section
2.1. Revolving Commitments. Subject to the terms and conditions of this
Agreement, each Bank severally agrees to make one or more advances to Borrower
from time to time from and including the Closing Date to but excluding the
Revolving Termination Date; provided that such Bank’s Revolving Exposure
shall not exceed the amount of such Bank’s Revolving Commitment as then in
effect. The aggregate outstanding Revolving Loans, Swingline Loans and LC
Exposure shall not at any time 


CREDIT AGREEMENT, Page 15 





exceed the lesser
of the Revolving Commitments of all of the Banks or the Borrowing Base. Subject
to the foregoing limitations, and the other terms and provisions of this
Agreement, Borrower may borrow, prepay, and reborrow hereunder the amount of
the Revolving Commitments and may establish Loans and, until the Revolving
Termination Date, Borrower may Continue Eurodollar Loans established under the
Revolving Loans. 


          Section
2.2. Evidence of Debt. Each Bank shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of Borrower
to such Bank resulting from each Revolving Loan made by such Bank, including
the amounts of principal and interest payable and paid to such Bank from time
to time hereunder. Agent shall maintain accounts in which it shall record (i)
the amount of each Revolving Loan made hereunder, and type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from Borrower to each
Bank hereunder and (iii) the amount of any sum received by Agent hereunder for
the account of the Banks and each Bank’s share thereof. The entries made in the
accounts maintained pursuant to this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein; provided
that the failure of any Bank or Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of Borrower to repay the
Revolving Loans in accordance with the terms of this Agreement. Upon the
request of any Bank, the Revolving Loans made by such Bank shall be evidenced
by a promissory note. Borrower shall execute and deliver to such Bank a
promissory note payable to the order of such Bank and in a form substantially
similar to the form of Revolving Note attached hereto as Exhibit A. 


          Section
2.3. Repayment of Loans. Borrower hereby unconditionally promises to pay
to Agent for the account of each Bank the then unpaid principal amount of each
Revolving Loan on the Revolving Termination Date. 


          Section
2.4. Revolving Commitment Fee. Subject to Section 2.9(a),
Borrower agrees to pay to Agent for the account of each Bank having a Revolving
Commitment a commitment fee on the daily average unused amount of such Bank’s
Revolving Commitment for the period from and including the Closing Date to but
excluding the Revolving Termination Date, at a rate equal to the Applicable
Margin specified for the Commitment Fee corresponding to Borrower’s applicable
Leverage Ratio (such fee, “Commitment Fee”). For the purpose of
calculating the Commitment Fee hereunder, the Revolving Commitments shall be
deemed utilized by the outstanding Revolving Exposure, except that, for
purposes of this Section 2.4 only, the Revolving Commitment of the Banks
besides the Swingline Bank shall not be deemed utilized by any Swingline Loans.
Accrued Commitment Fees under this Section 2.4 shall be payable in
arrears on each Quarterly Payment Date and on the Revolving Termination Date. 


          Section
2.5. Use of Proceeds. The proceeds of the Revolving Loans shall be used
by Borrower to refinance existing indebtedness and for ongoing working capital
needs and other general corporate purposes of Borrower and its Subsidiaries,
including, without limitation, the financing of Capital Expenditures. 


          Section
2.6. Voluntary Reductions or Terminations of Revolving Commitments. At
any time and from time to time from and including the Closing Date to but
excluding the Revolving Termination Date, Borrower shall have the right to
terminate or reduce in whole or in part the unused portion of the Revolving
Commitments, provided that: (i) Borrower shall give no less than three (3)
Business Day’s prior written notice of each such termination or reduction as
provided in Section 4.3, (ii) each partial reduction of the Revolving
Commitments shall be in an amount at least equal to Five Million Dollars
($5,000,000) or in additional increments of One Million Dollars ($1,000,000)and (iii) no reduction would reduce the
Revolving Commitments to below the Swingline Commitment and Letter of Credit
sublimit set forth in Section 2.7(b). The Revolving Commitments may not
be reinstated after they have been terminated or 


CREDIT AGREEMENT, Page 16 





reduced. Any reduction
or termination of the Revolving Commitments shall be accompanied by any payment
required under Section 4.4(b)(i). 


          Section
2.7. Letters of Credit. 


                    (a)
General. Subject to the terms and conditions set forth herein, Borrower
may request the issuance of Letters of Credit for its own account or for the
benefit of any of its Subsidiaries, in the form of a Letter of Credit Notice,
at any time and from time to time from the Closing Date to but excluding the
Revolving Termination Date (but subject to Section 2.7(c)). In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by Borrower to, or entered into by Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement
shall control. 


                    (b)
Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the Issuing Bank) to the Issuing Bank and Agent (at least
one (1) Business Day in advance of the requested date of issuance, amendment,
renewal or extension) irrevocable written notice, in the form attached hereto
as Exhibit D (a “Letter of Credit Notice”), requesting the
issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with clause (c) of
this Section), the amount of such Letter of Credit, the name and address
of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, Borrower also shall submit a letter of credit application on the
Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only
if (and upon issuance, amendment, renewal or extension of each Letter of Credit
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed Three Million Dollars ($3,000,000) and (ii) the sum of the total
Revolving Exposures shall not exceed the aggregate amount of the Revolving
Commitments. 


                    (c)
Expiration Date. Each Letter of Credit shall expire (i) on the date
approved by the Issuing Bank, which approval shall be evidenced by the issuance
of such Letter of Credit, or (ii) at or prior to the close of business on the
earlier of (A) the date one year after the date of issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (B) the date that is ten (10) days prior to the
Revolving Termination Date; provided, however, that the date
approved by the Issuing Bank as referred to in clause (i) preceding
shall not be later than the date referred to in clause (ii) preceding
without the prior written consent of the Agent and all Banks. 


                    (d)
Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Bank or the Banks, the Issuing Bank hereby
grants to each Bank, and each Bank hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Bank’s Commitment
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Bank hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Bank, such Bank’s Commitment Percentage of each LC Disbursement made by
the Issuing Bank and not reimbursed by Borrower on the date due as provided in clause
(e) of this Section, or of any reimbursement payment required to be
refunded to Borrower for any reason. Each Bank acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or 


CREDIT AGREEMENT, Page 17 





reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. 


                    (e)
Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement by
paying to Agent an amount equal to such LC Disbursement not later than 1:00 p.m.
on the date that such LC Disbursement is made, if Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m. on such date, or, if such
notice has not been received by Borrower prior to such time on such date, then
not later than 1:00 p.m. on the Business Day immediately following the day that
Borrower receives such notice; provided that Borrower may prior to the
Revolving Termination Date, subject to the conditions to borrowing set forth
herein, request in accordance with Section 4.1 that such payment be
financed with a Revolving Loan or a Swingline Loan in an equivalent amount and,
to the extent so financed, Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting Revolving Loan. If Borrower fails to
make such payment when due, Borrower shall be deemed to have requested an
advance of a Revolving Loan in an amount equal to the unreimbursed LC
Disbursement. To the extent such deemed borrowing would cause the total
Revolving Exposure to exceed the Revolving Commitment, Agent shall notify each Bank of the
applicable unreimbursed LC Disbursement, the payment then due from Borrower in
respect thereof and such Bank’s Commitment Percentage thereof. Promptly
following receipt of such notice, each Bank shall pay to Agent its Commitment
Percentage of the payment then due from Borrower, in the same manner as
provided in Section 4.1 with respect to Loans made by such Bank (and Section
4.1 shall apply, mutatis mutandis, to the payment obligations of
the Banks), and Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Banks. Promptly following receipt by Agent of any
payment from Borrower pursuant to this paragraph, Agent shall distribute such
payment to the Issuing Bank or, to the extent that the Banks have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Banks
and the Issuing Bank as their interests may appear. Any payment made by a Bank
pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of Loans as contemplated above) shall not
constitute a Loan and shall not relieve Borrower of its obligation to reimburse
such LC Disbursement. 


                    (f)
Obligations Absolute. Borrower’s obligation to reimburse LC
Disbursements as provided in clause (e) of this Section shall be
absolute, unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent, or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Article, constitute a legal or equitable
discharge of, or provide a right of setoff against, Borrower’s obligations
hereunder. Neither Agent, the Banks nor the Issuing Bank, nor any Person
related thereto, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
the Issuing Bank; provided that the foregoing shall not be construed to
excuse the Issuing Bank from liability to Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by Borrower to the extent permitted by applicable law) suffered
by Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of 


CREDIT AGREEMENT, Page 18 





gross negligence
or willful misconduct on the part of the Issuing Bank (as finally determined by
a court of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect
to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit. 


                    (g)
Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify Agent
and Borrower by telephone (confirmed by telecopy) of such demand for payment
and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve Borrower of its obligation to reimburse the Issuing Bank and
the Banks with respect to any such LC Disbursement. 


                    (h)
Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless Borrower shall reimburse (by actual payment or by a deemed
borrowing of Revolving Loans in accordance with clause (e) of this Section) such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest,
for each day from and including the date such LC Disbursement is made to but
excluding the date that Borrower reimburses such LC Disbursement, at the rate
per annum applicable to Revolving Loans plus
the Applicable Margin for Revolving Loans; provided that, if Borrower
fails to reimburse (by actual payment or by a deemed borrowing of Revolving
Loans in accordance with clause (e) of this Section) such LC
Disbursement when due pursuant to clause (e) of this Section,
then Section 3.3 shall apply to the portion of the LC Disbursement that
remains unreimbursed. Interest accrued pursuant to this Section shall be for
the account of the Issuing Bank, except that interest accrued on and after the
date of payment by any Bank pursuant to clause (e) of this Section
to reimburse the Issuing Bank shall be for the account of such Bank to the
extent of such payment. 


                    (i)
Replacement of the Issuing Bank. The Issuing Bank may be replaced at any
time by written agreement among Borrower, Agent, the replaced Issuing Bank and
the successor Issuing Bank. Agent shall notify the Banks of any such
replacement of the Issuing Bank. At the time any such replacement shall become
effective, Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to clause (k) of this Section.
From and after the effective date of any such replacement, (i) the successor
Issuing Bank shall have all the rights and obligations of the Issuing Bank
under this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to the term “Issuing Bank” shall be deemed to refer
to such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit issued by it prior
to such replacement, but shall not be required to issue additional Letters of
Credit. 


                    (j)
Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that Borrower receives notice from Agent or the
Required Banks demanding the deposit of cash collateral pursuant to this
paragraph or if Borrower is otherwise required to provide cash collateral for
LC Exposures under Section 4.4(b), Borrower shall deposit in an account
with Agent, in the name of Agent and for the benefit of the Banks, to be held
by Agent as collateral for the payment and performance of the obligations of
Borrower under this Agreement, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid letter of credit fees relating thereto
pursuant to clause (k) of this Section; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, 


CREDIT AGREEMENT, Page 19






upon the
occurrence of any Event of Default with respect to Borrower described in clause
(e) or (f) of Section 10.1 or on the Revolving Termination
Date if any Letter of Credit has an expiration date beyond the Revolving
Termination Date. Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of Agent in Investments of the type permitted by
clauses (a), (b), (c), (e), (h), and (i) of Section
8.5 hereto and at Borrower’s risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall be applied by Agent to reimburse the
Issuing Bank for LC Disbursements for which it is entitled to pursuant to clause
(e) of this Section and for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of Borrower for the LC Exposure at such time or, if
the maturity of the Loans has been accelerated (but subject to the consent of
the Banks with LC Exposure representing greater than fifty-one percent (51%) of
the total LC Exposure), be applied to satisfy other obligations of Borrower
under this Agreement. If Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be promptly returned to
Borrower after all Events of Default have been cured or waived. 


                    (k)
Fees. With respect to each Letter of Credit issued, Borrower agrees to
pay (i) to Agent for the account of each Bank a participation fee with respect
to its participations in such Letter of Credit, which shall accrue on the
average daily amount of such Bank’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) under such Letter of Credit
during the period from and including the date such Letter of Credit was issued
by the Issuing Bank to but excluding the date on which such Bank ceases to have
any LC Exposure under such Letter of Credit, at a rate per annum equal to the
Applicable Margin for Eurodollar Loans, and (ii) to the Issuing Bank a fronting
fee, equal to 12.5 basis points times the maximum amount available to be drawn
under such Letter of Credit, as well as the Issuing Bank’s standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Accrued participation fees shall
be due and payable on each Quarterly Payment Date and fronting fees shall be
due and payable on each issuance, amendment, renewal or extension of a Letter
of Credit; provided that all such fees shall be payable on the Revolving
Termination Date and any such fees accruing after the Revolving Termination
Date shall be payable on demand. All participation fees and fronting fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). None of the Banks (other than the Issuing Bank) are entitled to any
portion of the fronting fee. 


          Section
2.8. Swingline Loans.


                    (a)
Swingline Commitment. 


                              (i)
Commitment. Subject to the terms and conditions of this Agreement
(including the proviso below), the Swingline Bank agrees to make one or more
Swingline Loans to Borrower from time to time from and including the Closing
Date to but excluding the Revolving Termination Date in an aggregate principal
amount at any time outstanding up to but not exceeding the Swingline Commitment
provided, in no event shall the aggregate outstanding Revolving Loans, the
Swingline Loans and LC Exposure shall exceed the lesser of the Revolving
Commitment of all of the Banks or the Borrowing Base. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, Borrower may
borrow, prepay, and reborrow hereunder the amount of the Swingline Commitment; provided,
however, that, for avoidance of doubt, the Swingline Bank shall not have
any obligation or duty to make any Swingline Loans to Borrower (as the
Swingline Commitment is zero), but the Swingline Bank may or may not make
Swingline Loans from time to time in its sole and absolute discretion. 


CREDIT AGREEMENT, Page 20





                              (ii)
Bank Participation. On the date a Swingline Loan is made by the Swingline
Bank, the Swingline Bank shall be deemed, without further action by any party
hereto, to have sold to each Bank, and each Bank shall be deemed, without
further action by any party hereto, to have purchased from the Swingline Bank,
a risk participation to the extent of such Bank’s Commitment Percentage in the
Swingline Loan so made, such participation to be funded in accordance with
clause (b) of this Section 2.8. 


                    (b)
Repayment of Swingline Loans; Funding of Participation. Borrower shall
pay to the Swingline Bank for its own account the outstanding principal amount
of each Swingline Loan on the earlier of (i) the Revolving Termination Date or
(ii) the date which is the fifteenth day of the month in which the Swingline
Loan is made (if such Swingline Loan is made at any time during the first
fourteen days of the month) or (iii) the last Business Day of the fiscal month
in which such Swingline Loan was advanced (the earliest of such dates with
respect to a Swingline Loan herein the “Swingline Maturity”). Subject to
the other terms and conditions of this Agreement, Borrower may repay a
Swingline Loan on its Swingline Maturity under clause (ii) above or at any time
prior thereto by requesting a Revolving Loan in accordance with the terms
hereof, the proceeds of which shall be payable to the Swingline Bank for its
own account. The Swingline Bank, at any time in its sole and absolute
discretion and whether or not a Swingline Maturity shall have occurred, may
require that each Bank fund its participation in the then outstanding principal
amount of all Swingline Loans by giving each Bank notice thereof. Additionally,
if Borrower shall not have repaid a Swingline Loan by 1:00 P.M. on the
corresponding Swingline Maturity, the Swingline Bank will notify each Bank of
the aggregate principal amount of the Swingline Loan which has not been repaid.
Upon the giving of any notice by the Swingline Bank under either of the
preceding two sentences, each Bank shall make available to the Swingline Bank,
at the Principal Office, in immediately available funds, an amount equal to its
Commitment Percentage of the aggregate principal amount of Swingline Loan or
Swingline Loans subject to such notice by not later than 3:00 P.M. on the date
such notice is received if such notice is received by 1:00 P.M. or by 11:00
A.M. on the next Business Day, if such notice is received after 1:00 P.M.,
whether or not the conditions to a Loan under Article V are satisfied. 


                    (c)
Use of Proceeds. The proceeds of Swingline Loans shall be used by
Borrower to finance the working capital needs of Borrower in the ordinary
course of business. 


          Section
2.9. Defaulting Banks. Notwithstanding any provision of this Agreement
to the contrary, if any Bank becomes a Defaulting Bank, then the following
provisions shall apply for so long as such Bank is a Defaulting Bank: 


                    (a)
Suspension of Commitment Fees. The commitment fees shall cease to accrue on the
unfunded portion of the Revolving Commitment of such Defaulting Bank pursuant
to Section 2.4. 


                    (b)
Suspension of Voting. The Revolving Commitment and Revolving Exposure of
such Defaulting Bank shall not be included in determining whether all Banks
have taken or may take any action hereunder (including any consent to any
amendment or waiver pursuant to Section 10.02), provided that any
waiver, amendment or modification requiring the consent of all Banks or each
affected Bank which affects such Defaulting Bank differently than other
affected Banks shall require the consent of such Defaulting Bank. 


                    (c)
Participation Exposure. If any Swingline Exposure or LC Exposure exists
at the time a Bank becomes a Defaulting Bank then: 


                              (i)
all or any part of such Swingline Exposure and LC Exposure shall be reallocated
among the non-Defaulting Banks in accordance with their respective Commitment
Percentages but only to the extent (x) the sum of all non-Defaulting Banks’
Revolving Exposures plus such Defaulting 


CREDIT AGREEMENT, Page 21





Bank’s Swingline Exposure and LC Exposure does not exceed the total of all
non-Defaulting Banks’ Revolving Commitments and (y) the conditions set forth in
Section 5.2 are satisfied at such time; 


                              (ii)
if the reallocation described in clause (i) above cannot, or can only
partially, be effected, Borrower shall within five (5) Business Days following
notice by Agent (x) first, prepay such Swingline Exposure and (y) second, cash
collateralize such Defaulting Bank’s LC Exposure (after giving effect to any
partial reallocation pursuant to clause (i) above) in accordance with the
procedures set forth in Section 2.7(j) for so long as such LC Exposure
is outstanding; 


                              (iii)
if Borrower cash collateralizes any portion of such Defaulting Bank’s LC
Exposure pursuant to this Section 2.9, Borrower shall not be required to
pay any fees to such Defaulting Bank pursuant to Section 2.7(k) with
respect to such Defaulting Bank’s LC Exposure during the period such Defaulting
Bank’s LC Exposure is cash collateralized; 


                              (iv)
if the LC Exposure of the non-Defaulting Banks is reallocated pursuant to this Section
2.9, then the fees payable to the Banks pursuant to Section 2.4 shall
be adjusted in accordance with such non-Defaulting Banks’ Commitment
Percentages; and 


                              (v)
if any Defaulting Bank’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.9, then, without prejudice to any
rights or remedies of the Issuing Bank or any Bank hereunder, all letter of
credit fees payable under Section 2.4 with respect to such Defaulting Bank’s LC
Exposure shall be payable to the Issuing Bank until such LC Exposure is cash
collateralized and/or reallocated. 


                    (d)
Suspension of Swingline Loans and Letters of Credit. So long as any Bank
is a Defaulting Bank, the Swingline Bank shall not be required to fund any
Swingline Loan and the Issuing Bank shall not be required to issue, amend or
increase any Letter of Credit, unless it is satisfied that the related exposure
will be 100% covered by the Revolving Commitments of the non-Defaulting Banks
and/or cash collateral will be provided by Borrower in accordance with this Section
2.9, and participating interests in any such newly issued or increased
Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Banks (and Defaulting Banks shall not participate therein). 


                    (e)
Setoff Against Defaulting Bank. Any amount payable to a Defaulting Bank
(whether on account of principal, interest, fees or otherwise and including any
amount that would otherwise be payable to such Defaulting Bank) shall, in lieu
of being distributed to such Defaulting Bank, be retained by Agent in a
segregated account and, subject to any applicable requirements of law, be
applied at such time or times as may be determined by Agent (i) first, to the
payment of any amounts owing by such Defaulting Bank to Agent hereunder, (ii)
second, pro rata, to the payment of any amounts owing by such Defaulting Bank
to the Issuing Bank or Swingline Bank hereunder, (iii) third, to the funding of
any Loan or the funding or cash collateralization of any participating interest
in any Swingline Loan or Letter of Credit in respect of which such Defaulting
Bank has failed to fund its portion thereof as required by this Agreement, as
determined by Agent, (iv) fourth, if so determined by Agent and Borrower, held
in such account as cash collateral for future funding obligations of the
Defaulting Bank under this Agreement, (v) fifth, pro rata, to the payment of
any amounts owing to Borrower or the Banks as a result of any judgment of a
court of competent jurisdiction obtained by Borrower or any Bank against such
Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations
under this Agreement and (vi) sixth, to such Defaulting Bank or as otherwise
directed by a court of competent jurisdiction; provided that if such payment is
(x) a prepayment of the principal amount of any Loans or reimbursement
obligations in respect of LC Disbursements which a Defaulting Bank has funded
its participation obligations and (y) made at a time when the conditions set
forth in Section 5.2 are satisfied, such payment shall be applied solely
to prepay the Loans of, and reimbursement obligations owed to, all
non-Defaulting Banks pro rata prior to being applied to the prepayment of any
Loans, or reimbursement obligations owed to, any Defaulting Bank. 


CREDIT AGREEMENT, Page 22





In the event
that Agent, Borrower, the Issuing Bank and the Swingline Bank each agrees that
a Defaulting Bank has adequately remedied all matters that caused such Bank to
be a Defaulting Bank, then the Swingline Exposure and LC Exposure of the Banks
shall be readjusted to reflect the inclusion of such Bank’s Revolving
Commitment and on such date such Bank shall purchase at par such of the Loans
of the other Banks (other than Swingline Loans) as Agent shall determine may be
necessary in order for such Bank to hold such Loans in accordance with its
Commitment Percentage. 


          Section
2.10. Increase of Revolving Commitments. By written notice sent to the
Agent (which the Agent shall promptly distribute to the Revolving Banks), the
Borrower may request an increase of the aggregate amount of the Revolving
Commitments by an aggregate amount not to exceed $10,000,000; provided that no
Default shall have occurred and be continuing. Each Revolving Bank, in its sole
and absolute discretion, shall determine whether it will increase its Revolving
Commitment. If one or more of the Revolving Banks will not be increasing its
Revolving Commitment pursuant to such request, then, with notice to the Agent
and the other Revolving Banks, another one or more financial institutions, each
as approved by the Borrower and the Agent (a “New Bank”), may commit to
provide an amount equal to the aggregate amount of the requested increase that
will not be provided by the existing Revolving Banks (the “Increase Amount”);
provided, that the Revolving Commitment of each New Bank shall be at least
$5,000,000 and the maximum number of New Banks shall be two (2). Upon receipt
of notice from the Agent to the Revolving Banks and the Borrower that the
Revolving Banks, or sufficient Revolving Banks and New Banks, have agreed to
commit to an aggregate amount equal to the Increase Amount (or such lesser
amount as the Borrower shall agree, which shall be at least $5,000,000 and an
integral multiple of $5,000,000 in excess thereof), then, and provided that no
Default exists at such time or after giving effect to the requested increase,
the Borrower, the Agent and the Revolving Banks willing to increase their
respective Revolving Commitments and the New Banks (if any) shall execute and
deliver such documentation relating to such increase, in form and substance
reasonably acceptable to the Agent, as the Agent may request. 


ARTICLE III.


Interest


          Section
3.1. Interest Rate. Subject to Section 12.12, Borrower shall pay
to Agent for the account of each Bank (including the Swingline Bank as a Bank)
interest on the unpaid principal amount of each Loan made by such Bank for the
period commencing on the date of such Loan to but excluding the date such Loan
is due. 


                    (a)
Subject to Section 3.3 and Section 12.12, the principal amount of
all Base Rate Loans shall accrue interest at a fluctuating rate per annum equal
to the Base Rate plus the
Applicable Margin. 


                    (b)
Borrower shall elect an Interest Period for Eurodollar Loans. Subject to Section
3.3 and Section 12.12, the principal amount of all Eurodollar Loans
outstanding during such Interest Period shall accrue interest at the Adjusted
Eurodollar Rate determined with respect to such Interest Period plus the Applicable Margin. No more than
ten (10) Interest Periods for the Eurodollar Loans will be in effect at any
time. Each Interest Period shall remain in effect until the maturity of such
Interest Period. On the third Business Day prior to the maturity of any
Interest Period, so long as no Default exists, Borrower shall elect a new
Interest Period by giving notice to Agent thereof (which notice may be given by
telephone promptly confirmed in writing by a Responsible Officer). If Borrower
fails to elect a new Interest Period on the third Business Day prior to the
maturity of an Interest Period, then the Interest Period shall be deemed to be
an Interest Period of one month. If a Default exists on the third Business Day
prior to the maturity of any Interest Period Agent, in its discretion, shall
elect the length of the next Interest Period. 


CREDIT AGREEMENT, Page 23





                    (c)
Swingline Loans shall accrue interest at a fluctuating rate per annum equal to
the Base Rate plus the Applicable
Margin. Swingline Loans shall not accrue interest based upon the Adjusted
Eurodollar Rate. 


          Section
3.2. Payment Dates. 


                    (a)
Accrued interest on the Base Rate Loans shall be due and payable on each
Quarterly Payment Date and the Revolving Termination Date. 


                    (b)
Accrued interest on the Eurodollar Loans shall be due and payable on any date
of prepayment, the Revolving Termination Date and on the last day of an
Interest Period, and, if such Interest Period is longer than ninety days, every
ninety (90) days after the commencement of such Interest Period. 


                    (c)
Accrued interest on the Swingline Loans shall be due and payable on the
Swingline Maturity related to such Swingline Loan and on the Revolving
Termination Date. 


          Section
3.3. Default Interest. Notwithstanding the foregoing, Borrower will pay
to Agent for the account of each Bank interest at the applicable Default Rate
on any principal of any Loan made by such Bank, and (to the fullest extent
permitted by law) any other amount payable by Borrower under any Loan Document
to or for the account of Agent or such Bank, that is not paid in full when due
(whether at stated maturity, by acceleration, or otherwise), for the period
from and including the due date thereof to but excluding the date the same is
paid in full. Interest payable at the Default Rate shall be payable from time
to time on demand and if not sooner demanded on each the first Business Day of
each fiscal month. 


          Section
3.4. Conversions and Continuations of Loans. Subject to Section 5.2,
Borrower shall have the right from time to time to (a) convert all or part of
any Base Rate Loan (other than a Swingline Loan) into a Eurodollar Loan, (b)
continue all or any part of a Eurodollar Loan as a Eurodollar Loan, and (c)
convert all of any part of a Eurodollar Loan into a Base Rate Loan, provided
that: (i) Borrower shall give Agent notice of each such conversion or
continuation as provided in Section 4.3; (ii) a Eurodollar Loan may only
be converted on the last day of the Interest Period therefor; and (iii) except
for conversions into Base Rate Loans, no conversions or continuations shall be
made while a Default has occurred and is continuing. 


          Section
3.5. Computations. Interest and fees related to the Eurodollar Loans
payable by Borrower hereunder and under the other Loan Documents shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable unless such calculation would result in a usurious
rate, in which case interest shall be calculated on the basis of a year of 365
or 366 days, as the case may be. Interest and fees related to the Base Rate
Loans payable by Borrower hereunder and under the other Loan Documents shall be
computed on the basis of a year of 365 or 366 days, as the case may be. 


ARTICLE IV. 


Administrative Matters 


          Section
4.1. Borrowing Procedure.


                    (a)
Subject to Section 4.1(b), Borrower shall give Agent, and Agent will
give the Banks, notice of each borrowing under the Commitments in accordance
with Section 4.3. Not later than 1:00 p.m. on the date specified for
each such borrowing (other than a Swingline Loan) each Bank will make available
to Agent the amount of the Loan to be made by it on such date, at the Principal
Office, in immediately available funds, for the account of Borrower, provided
that Swingline Loans shall be made as 


CREDIT AGREEMENT, Page 24





provided in Section
2.8. The amount so received by Agent shall, subject to the terms and
conditions of this Agreement, be made available to Borrower by (a) depositing
the same, in immediately available funds, in an account of Borrower (designated
by Borrower) maintained with Agent at the Principal Office (a “Disbursement
Account”) or (b) wire transferring such funds to a Person or Persons
designated by Borrower in writing; provided that Revolving Loans made to
finance the reimbursement of an LC Disbursement as provided in Section
2.7(e) shall be remitted by Agent to the Issuing Bank. If any Bank shall
not have made its full amount available to Agent in immediately available funds
and if Agent in such circumstances has made available to Borrower such amount,
that Bank shall on the Business Day following such funding date make such
amount available to Agent, together with interest at the Defaulting Bank Rate
for each day during such period. 


                    (b)
No notice of a request for a Revolving Loan in accordance with Section
4.1(a) shall be required to be presented by Borrower to Agent if (i) no
Default exists, and a check, checks, or other debit shall be presented for
payment against a Disbursement Account on a Business Day when funds are not
otherwise available to honor such debits or (ii) Borrower fails to pay when due
any Obligation. In either event, Agent shall (in the case of clause (i)) or may
(in the case of clause (ii)) without Borrower’s or any Bank’s consent promptly
advise the Banks of the amount of the Revolving Loans or shall advise the
Swingline Bank of the amount of the Swingline Loans, necessary to (x) be
credited to the Disbursement Account on such day to permit such debits to be
honored or (y) pay the amount of the Obligation due and unpaid. Not later than
3:00 P.M. on the day the Banks are advised of a Revolving Loan under this Section
4.1(b), each Bank will make available the amount of the Revolving Loan to
be made by it on such date to Agent, at the Principal Office, in immediately
available funds, for the account of Borrower. However, if the Swingline Bank is
advised of such amount, the Swingline Bank will make available the amount of
the Swingline Loan to be made by it on such date to Agent, at the Principal
office, in immediately available funds, for the account of the applicable
Borrower not later than 3:00 P.M. on such date. The amounts so received by
Agent, shall, subject to the terms and conditions of this Agreement, be made
available to Borrower by crediting the same to the applicable Disbursement
Account or by utilizing the same to pay the past due Obligation, as applicable.
Revolving Loans made under this Section 4.1(b) shall be made as Base
Rate Loans. 


          Section
4.2. Minimum Amounts for Borrowings. Except for financings of
reimbursements of LC Disbursements as contemplated by Section 2.7(e) and
Revolving Loans made pursuant to Section 4.1(b), each Revolving Loan
shall be in an amount at least equal to (a) Two Hundred Fifty Thousand Dollars
($250,000) or any larger amounts in increments of One Hundred Dollars
($100,000) or (b) the remaining unfunded amount of the Revolving Commitments. 


          Section
4.3. Certain Notices. Each termination or reduction of Commitments,
borrowing of Loans and prepayment of Loans shall be made upon Borrower’s notice
(which may be given by telephone promptly confirmed in writing by a Responsible
Officer) to Agent in the form of Exhibit
E hereto or another form reasonably acceptable to Agent and shall be
effective only if received by Agent not later than 10:00 a.m. on the (a) day of
the borrowing of a Swingline Loan, (b) first day prior to any borrowing,
prepayment or repayment of any Base Rate Loan and (c) third Business Day prior
to any borrowing, prepayment or repayment of any other Loan. Any such notice
which is received by Agent after 10:00 a.m. on a Business Day shall be deemed
to be received and shall be effective on the next Business Day. Each such
notice when providing notice of a borrowing or prepayment shall specify: (a)
the Loans to be borrowed or prepaid; (b) the amount (subject to Section 4.2
hereof) to be borrowed or prepaid; (c) the date of borrowing or prepayment
(which shall be a Business Day); and (d) the Interest Period for any borrowing
of a Eurodollar Loan. Agent shall notify the Banks of the contents of each
notice on the date of its receipt of the same or, if received on or after 10:00
a.m. on a Business Day, on the next Business Day. 


CREDIT AGREEMENT, Page 25





          Section
4.4. Prepayments. 


                    (a)
Optional Prepayments. Subject to Section 4.2 and the provisions
of this Section 4.4, Borrower may, at any time and from time to time
without premium or penalty upon prior notice to Agent as specified in Section
4.3, prepay or repay any Loan in full or in part. Eurodollar Loans may be
prepaid or repaid only on the last day of the Interest Period applicable
thereto unless Borrower pays to Agent for the account of the applicable Banks
any amounts due under Section 4.12 as a result of such prepayment or
repayment. Any optional prepayment of a Loan shall be accompanied with accrued
interest on the amount prepaid to the date of prepayment and any partial
prepayments thereof shall be applied to the principal installments due in the
inverse order of maturity. 


                    (b)
Mandatory Prepayments. 


                              (i)
Reduction of Revolving Commitment. On each date that the Revolving
Commitments are reduced pursuant to Section 2.6 prior to the Revolving
Termination Date, Borrower shall prepay the Revolving Loans in the amount, if
any, by which the sum of the total Revolving Exposure exceeds the total
Revolving Commitments (as reduced) or, if no Revolving Loans are outstanding,
deposit cash collateral in an account with Agent pursuant to Section 2.7(j)
in an amount equal to such excess. 


                              (ii)
Revolving Exposures Exceed Revolving Commitments. In the event, and on
each occasion, that the sum of the total Revolving Exposure exceeds the total
Revolving Commitments, Borrower shall prepay the Revolving Loans (or, if no
Revolving Loans are outstanding, deposit cash collateral in an account with
Agent pursuant to Section 2.7(j)) in an amount equal to such excess. 


                              (iii)
Revolving Exposures Exceed Borrowing Base. If at any time the
outstanding principal amount of the Revolving Exposures exceeds the Borrowing
Base, Borrower shall within one (1) Business Day after the occurrence thereof
prepay the outstanding Revolving Loans by the amount of the excess plus accrued
and unpaid interest on the amount so prepaid (or, if no Revolving Loans are
outstanding, deposit cash collateral in an account with Agent pursuant to Section
2.7(j)) in an amount equal to such excess. 


                              (iv)
Mandatory Prepayment from Prepayment Event. In the event and on each
occasion that any Net Proceeds are received by or on behalf of Borrower or any
Subsidiary in respect of any Prepayment Event, Borrower shall, within three (3)
Business Days after such Net Proceeds are received, prepay the Revolving Loans
in an aggregate amount equal to such Net Proceeds; provided that: 


                                        (A)
in the case of any event described in clauses (a) or (b) of the
definition of the term Prepayment Event, if Borrower and the Subsidiaries
intend to apply the Net Proceeds from such event, within 180 days after receipt
of such Net Proceeds, to acquire or repair assets to be used in the business of
Borrower, then no prepayment shall be required pursuant to this paragraph in
respect of such event except (I) to the extent of any Net Proceeds therefrom
that have not been so applied within 180 days after receipt of such Net
Proceeds, at which time a prepayment shall be required in an amount equal to
the Net Proceeds that have not been so applied or (II) if, at the time of the
proposed application of the Net Proceeds, a Default exists, then, at that time,
a prepayment shall be required in an amount equal to such Net Proceeds; and 


                                        (B)
Net Proceeds from a single Prepayment Event shall not be required to be used to
prepay Loans under this paragraph (iv) if the aggregate amount of Net Proceeds
received from such Prepayment Event do not exceed $100,000 unless such Net Proceeds, when added to
the aggregate amount of Net Proceeds received from all Prepayment Events
occurring in the same fiscal year which are not reinvested pursuant to this
paragraph, exceed $100,000 (in which event the aggregate amount of such Net
Proceeds from all such Prepayment Events in excess of $100,000 shall then be
required 


CREDIT AGREEMENT, Page 26





to be used to
prepay the Loans under this paragraph). 


                              (v)
Designation of Prepayment. Borrower shall notify Agent in writing of
each prepayment. Proceeds of any prepayment under Section 4.4(b)(iv)
shall first be applied to the outstanding Revolving Loans or, if no Revolving
Loans are outstanding, to cash collateralize the Obligations pursuant to Section
2.7(j). 


          Section
4.5. Method of Payment. Except as otherwise expressly provided herein,
all payments of principal, interest, and other amounts to be made by any
Obligated Party under the Loan Documents shall be made to Agent at the
Principal Office for the account of each Bank’s Applicable Lending Office in
Dollars and in immediately available funds, without setoff, deduction, or
counterclaim, not later than 1:00 p.m. on the date on which such payment shall
become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). Borrower and
each Obligated Party shall, at the time of making each such payment, specify to
Agent the sums payable under the Loan Documents to which such payment is to be
applied (and in the event that Borrower fails to so specify, or if an Event of
Default has occurred and is continuing, Agent may apply such payment and any
proceeds of any Collateral to the Obligations that are due and payable in such
order and manner as the Required Banks may elect in their sole discretion,
subject to Section 4.6 hereof). Each payment received by Agent under any
Loan Document for the account of a Bank shall be paid to such Bank by 3:00 p.m.
on the date the payment is deemed made to Agent in immediately available funds,
for the account of such Bank’s Applicable Lending Office. Whenever any payment
under any Loan Document shall be stated to be due on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of the
payment of interest and Commitment Fee, as the case may be. Notwithstanding the
foregoing, the Borrower hereby irrevocably authorizes the Agent to charge any
deposit account of the Borrower maintained with the Agent for each payment of
principal, interest and fees as it becomes due hereunder or any other amount
due under the Loan Documents. 


          Section
4.6. Pro Rata Treatment; Proceeds of Collateral and Guaranty. 


                    (a)
Pro Rata Treatment. Except to the extent otherwise provided herein: (a)
each Loan shall be made by the Banks, each payment of Commitment Fees under Section
2.4 shall be made for the account of the Banks holding a Commitment, and
each termination or reduction of the Commitments shall be applied to the
Commitments of the Banks, pro rata according to their respective Commitment
Percentages; and (b) each payment and prepayment of principal of or interest on
Loans by Borrower shall be made to Agent for the account of Agent or the Banks
holding such Loans pro rata in accordance with the respective unpaid principal
amounts of such Loans or participation interests held by Agent or such Banks
(provided that only the Swingline Bank shall be entitled to principal and
interest on the Swingline Loans unless the other Banks have funded their
participation in accordance with Section 2.8(b)). Except as expressly
provided herein to the contrary, all payments received by Agent shall be
applied in the following order of priority: (i) the payment or reimbursement of
any expenses, costs or obligations (other than the outstanding principal
balance hereof and interest hereon) for which either Borrower shall be
obligated or Agent shall be entitled pursuant to the provisions of this
Agreement or the other Loan Documents; (ii) the payment of accrued but unpaid
interest hereon; and (iii) the payment of all or any portion of the principal
balance hereof then outstanding hereunder, in the direct order of maturity. If
an Event of Default exists under any of the Loan Documents, then subject to
clause (b) below, Agent may (or, at the direction of Required Banks, shall)
apply any such payments, at any time and from time to time, to any of the items
specified in clauses (i), (ii) or (iii) above without regard to the order of
priority otherwise specified in this clause (a) and any application to the
outstanding principal balance hereof may be made in either direct or inverse
order of maturity. 


CREDIT AGREEMENT, Page 27





                    (b)
Proceeds of Collateral and Guaranty. All proceeds received by Agent from
Agent’s sale or other liquidation of the Collateral when an Event of Default
exists and all collections on the Guaranty shall first be applied as payment of
the accrued and unpaid fees of Agent hereunder and then to all other unpaid or
unreimbursed Obligations (including reasonable attorneys’ fees and expenses)
owing to Agent in its capacity as Agent only and then any remaining amount of
such proceeds shall be distributed: 


                              (i)
first, to the Secured Parties, pro rata in accordance with the
respective aggregate unpaid amounts of Loan Obligations, until all the Loan
Obligations have been Fully Satisfied; 


                              (ii)
second, to the Secured Parties, pro rata in accordance with the
respective aggregate unpaid amounts of Hedging Obligations, until all the
Hedging Obligations have been Fully Satisfied; 


                              (iii)
third, to the Secured Parties, pro rata in accordance with the
respective unpaid amounts of the Deposit Obligations then due and owing, until
all Deposit Obligations have been paid and satisfied in full or cash
collateralized; 


                              (iv)
fourth, to the Secured Parties, pro rata in accordance with the
respective unpaid amounts of the remaining Obligations then due and owing; and 


                              (v)
fifth, any proceeds then remaining shall be delivered to the Person
entitled thereto as directed by Borrower or as otherwise determined by
applicable law or applicable court order. 


                    (c)
Noncash Proceeds. Notwithstanding anything contained herein to the
contrary, if Agent shall ever acquire any Collateral through foreclosure or by
a conveyance in lieu of foreclosure or by retaining any of the Collateral in
satisfaction of all or part of the Obligations or if any proceeds of Collateral
received by Agent to be distributed and shared pursuant to this Section 4.6
are in a form other than immediately available funds, Agent shall not be
required to remit any share thereof under the terms hereof and the Secured
Parties shall only be entitled to their undivided interests in the Collateral
or noncash proceeds as determined by Section 4.6(b). The Secured Parties
shall receive the applicable portions (in accordance with the foregoing clause
(b)) of any immediately available funds consisting of proceeds from such
Collateral or proceeds of such noncash proceeds so acquired only if and when
received by Agent in connection with the subsequent disposition thereof. While
any Collateral or other property to be shared pursuant to this Section 4.6
is held by Agent pursuant to this clause (b), Agent shall hold such Collateral
or other property for the benefit of the Secured Parties and all matters
relating to the management, operation, further disposition or any other aspect
of such Collateral or other property shall be resolved by the agreement of the
Required Banks. 


                    (d)
Return of Proceeds. If at any time payment, in whole or in part, of any
amount distributed by Agent hereunder is rescinded or must otherwise be
restored or returned by Agent as a preference, fraudulent conveyance, or
otherwise under any bankruptcy, insolvency, or similar law, then each Person
receiving any portion of such amount agrees, upon demand, to return the portion
of such amount it has received to Agent. 


          Section
4.7. Sharing of Payments. If a Bank shall obtain payment of any
principal of or interest on any of the Loan Obligations arising under the Loan
Documents due to such Bank hereunder directly (and not through Agent) through
the exercise of any right of set-off, banker’s lien, counterclaim, or similar
right, or otherwise, it shall promptly purchase from the other Banks
participations in such Loan Obligations held by the other Banks in such
amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all the Banks shall share the benefit of such payment
pro rata in accordance with the unpaid principal of and interest on such Loan
Obligations then due to each of them. To such end, all of the Banks shall make
appropriate adjustments among themselves (by the resale of participations sold
or 


CREDIT AGREEMENT, Page 28





otherwise) if
all or any portion of such excess payment is thereafter rescinded or must
otherwise be restored. Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Bank so purchasing a
participation in such Loan Obligations held by the other Banks may exercise all
rights of set-off, banker’s lien, counterclaim, or similar rights with respect
to such participation as fully as if such Bank were a direct holder of such
Loan Obligations in the amount of such participation. Nothing contained herein
shall require any Bank to exercise any such right or shall affect the right of
any Bank to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of Borrower. 


          Section
4.8. Non-Receipt of Funds by Agent. Unless Agent shall have been
notified by a Bank or Borrower (the “Payor”) prior to the date on which
such Bank is to make payment to Agent hereunder or Borrower is to make a
payment to Agent for the account of one or more of the Banks, as the case may
be (such payment being herein called the “Required Payment”), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to Agent, Agent may assume that the Required Payment has
been made and may, in reliance upon such assumption (but shall not be required
to), make the amount thereof available to the intended recipient on such date
and, if the Payor has not in fact made the Required Payment to Agent, (i) the
recipient of such payment shall, on demand, pay to Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by Agent until the
date Agent recovers such amount at a rate per annum equal to the Defaulting
Bank Rate for such period and (ii) Agent shall be entitled to offset against
any and all sums to be paid to such recipient, the amount calculated in
accordance with the foregoing clause (i). 


          Section
4.9. Withholding Taxes. All payments by Borrower of amounts payable
under any Loan Document shall be payable without deduction for or on account of
any present or future taxes, duties, or other charges levied or imposed by the
United States of America or by the government of any jurisdiction outside the
United States of America or by any political subdivision or taxing authority of
or in any of the foregoing through withholding or deduction with respect to any
such payments (but excluding any tax imposed on or measured by the net income
or profit of a Bank pursuant to the laws of the jurisdiction in which it is
organized or in which the principal office or Applicable Lending Office of such
Bank is located or any subdivision thereof or therein). If any such taxes,
duties, or other charges are so levied or imposed, Borrower will make
additional payments in such amounts so that every net payment of amounts
payable by it under any Loan Document, after withholding or deduction for or on
account of any such present or future taxes, duties, or other charges, will not
be less than the amount provided for herein or therein, provided that Borrower
may withhold to the extent required by law and shall have no obligation to pay
such additional amounts to any Bank to the extent that such taxes, duties, or
other charges are levied or imposed by reason of the failure or inability of
such Bank to comply with the provisions of Section 4.10. Borrower shall
furnish promptly to Agent for distribution to each affected Bank, as the case
may be, official receipts evidencing any such withholding or reduction. 


          Section
4.10. Withholding Tax Exemption. Each Bank that is not organized under
the laws of the United States of America or a state thereof agrees that it will
deliver to Borrower and Agent two duly completed copies of the appropriate
United States Internal Revenue Service Form certifying that such Bank is
entitled to receive payments from Borrower under any Loan Document without
deduction or withholding of any United States of America federal income taxes.
Each Bank which so delivers such a form further undertakes to deliver to
Borrower and Agent two (2) additional copies of such form on or before the date
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by Borrower or Agent, in each case certifying that such Bank is
entitled to receive payments from Borrower under any Loan Document without
deduction or withholding of any United States of America federal income taxes,
unless an event (including without limitation any change in treaty, law, or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which 


CREDIT AGREEMENT, Page 29





renders all
such forms inapplicable or which would prevent such Bank from duly completing
and delivering any such form with respect to it and such Bank advises Borrower
and Agent that it is not capable of receiving such payments without any
deduction or withholding of United States of America federal income tax. 


          Section
4.11. Capital Adequacy. If any Bank shall have determined in good faith
that any Regulatory Change has the effect of reducing the rate of return on
such Bank’s (or its parent’s) capital as a consequence of its obligations
hereunder or the transactions contemplated hereby to a level below that which
such Bank (or its parent) would have achieved but for such Regulatory Change
(taking into consideration such Bank’s policies with respect to capital
adequacy) by an amount deemed in good faith by such Bank to be material, then
from time to time, within ten (10) Business Days after demand by such Bank
(with a copy to Agent), Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank (or its parent) for such reduction. A
certificate of such Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive, provided that the determination thereof is made on a reasonable
basis. In determining such amount or amounts, such Bank may use any reasonable
averaging and attribution methods. If any Bank claims compensation under this
Section, then, at the request of Borrower, Agent shall use reasonable efforts
to replace such Bank with a Bank not so affected by such Regulatory Change. 


          Section
4.12. Compensation. Borrower shall pay to Agent for the account of each
Bank, upon the request of such Bank, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost, or expense incurred by it as a result of: 


                    (a)
Any payment or prepayment of a Eurodollar Loan for any reason (including,
without limitation, the acceleration of the outstanding Loans pursuant to Section
10.2(a)) on a date other than the last day of an Interest Period for the
applicable Eurodollar Loan; or 


                    (b)
Any failure by Borrower for any reason (including, without limitation, the
failure of any conditions precedent specified in Article V to be
satisfied) to borrow or prepay a Eurodollar Loan on the date for such borrowing
or prepayment specified in the relevant notice of borrowing or prepayment,
under this Agreement. 


Without
limiting the effect of the preceding sentence, such compensation shall include
an amount equal to the excess, if any, of (i) the amount of interest which
otherwise would have accrued on the principal amount so paid or not borrowed
for the period from the date of such payment or failure to borrow to the last
day of the Interest Period for such Eurodollar Loan (or, in the case of a
failure to borrow, the Interest Period for such Eurodollar Loan which would
have commenced on the date specified for such borrowing) at the applicable rate
of interest for such Eurodollar Loan provided for herein over (ii) the interest
component of the amount such Bank would have bid in the European interbank
market for U.S. Dollar deposits of leading banks and amounts comparable to such
principal amount and with maturities comparable to such period. 


          Section
4.13. Additional Costs. 


                    (a)
Borrower shall pay directly to each Bank or the Issuing Bank, as the case may
be, from time to time such amounts as such Bank or the Issuing Bank may
reasonably determine to be necessary to compensate it for any reasonable costs
incurred by such Bank or the Issuing Bank, as the case may be, which such Bank
or the Issuing Bank reasonably determines are attributable to its making or
maintaining of any Loans or Letters of Credit, as the case may be, or its
obligation to make any of such Loans or Letters of Credit hereunder, or any
reduction in any amount receivable by such Bank or the Issuing Bank hereunder
in respect of any such Loans, such Letters of Credit or such obligation (such 


CREDIT AGREEMENT, Page 30





increases in
costs and reductions in amounts receivable being herein called “Additional
Costs”), resulting from any Regulatory Change which: 


                              (i)
changes the basis of taxation of any amounts payable to such Bank or the
Issuing Bank under this Agreement or its Revolving Notes in respect of any of
such Loans or Letters of Credit (other than franchise taxes and taxes imposed
on the overall net income of such Bank or the Issuing Bank or its Applicable
Lending Office for any of such Loans or Letters of Credit by the United States
of America or any state or subdivision thereof or the jurisdiction in which
such Bank or the Issuing Bank has its Principal Office or such Applicable
Lending Office); 


                              (ii)
imposes or modifies any reserve, special deposit, minimum capital, capital ratio,
or similar requirement relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Bank or the
Issuing Bank, as the case may be (including any of such Loans or any deposits
referred to in the definitions of “Adjusted Eurodollar Rate” and “Statutory
Reserve Rate” in Section 1.1 hereof); or 


                              (iii)
imposes any other condition affecting this Agreement or the Revolving Notes or
the Letters of Credit or any of such extensions of credit or liabilities or
commitments. 


Each Bank and
the Issuing Bank, as applicable, will notify Borrower (with a copy to Agent) of
any event occurring after the date of this Agreement which will entitle such
Bank or the Issuing Bank, as the case may be, to compensation pursuant to this Section
4.13(a) as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and will designate a different
Applicable Lending Office for the Loans or Letters of Credit, as the case may
be, affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole opinion of
such Bank or the Issuing Bank, as the case may be, violate any law, rule, or
regulation or be in any way disadvantageous to such Bank or the Issuing Bank.
Each Bank and the Issuing Bank, as applicable, will furnish Borrower with a
certificate setting forth the basis and the amount of each request of such Bank
or the Issuing Bank for compensation under this Section 4.13(a). If any
Bank or the Issuing Bank requests compensation from Borrower under this Section
4.13(a), Borrower may, by notice to such Bank or the Issuing Bank, as the
case may be (with a copy to Agent), suspend the obligation of such Bank to make
Eurodollar Loans or Continue Eurodollar Loans as Eurodollar Loans or suspend
the obligation of the Issuing Bank to issue Letters of Credit, as applicable,
until the Regulatory Change giving rise to such request ceases to be in effect.



                    (b)
Without limiting the effect of the foregoing provisions of this Section 4.13,
in the event that, by reason of any Regulatory Change, any Bank or the Issuing
Bank either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Bank or the Issuing Bank, as the case may be, which
includes deposits by reference to which the interest rate on the Eurodollar
Loans is determined as provided in this Agreement or a category of extensions
of credit or other assets of such Bank which includes Eurodollar Loans or with
respect to the Issuing Bank which includes Letters of Credit or (ii) becomes
subject to restrictions on the amount of such a category of liabilities or
assets which it may hold, then, if such Bank or the Issuing Bank, as the case
may be, so elects by notice to Borrower (with a copy to Agent), the obligation
of such Bank to make Eurodollar Loans or Continue Eurodollar Loans as Eurodollar
Loans or the obligation of the Issuing Bank to issue Letters of Credit, as the
case may be, shall be suspended until the Regulatory Change giving rise to such
request ceases to be in effect (in which case the provisions of Section 4.15
hereof shall be applicable). 


                    (c)
Determinations and allocations by any Bank or the Issuing Bank for purposes of
this Section 4.13 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make 


CREDIT AGREEMENT, Page 31






Loans, to
issue Letters of Credit, of making or maintaining Loans, of making or
maintaining Letters of Credit, or on amounts receivable by it in respect of the
Loans or the Letters of Credit, as the case may be, and of the additional
amounts required to compensate such Bank or the Issuing Bank in respect of any
Additional Costs, shall, absent manifest error, be conclusive, provided that
such determinations and allocations are made on a reasonable basis. 


          Section
4.14. Limitation on Eurodollar Loans. Anything herein to the contrary
notwithstanding, if with respect to any Eurodollar Loans under a Loan for any
Interest Period therefor: 


                    (a)
Agent determines (which determination shall be conclusive) that quotations of
interest rates for the relevant deposits referred to in the definitions of
“Adjusted Eurodollar Rate” and “Statutory Reserve Rate” in Section 1.1
hereof are not being provided in the relative amounts or for the relative
maturities for purposes of determining the rate of interest for Eurodollar
Loans as provided in this Agreement; or 


                    (b)
Required Banks determine (which determination shall be conclusive) and notify
Agent that the relevant rates of interest referred to in the definitions of
“Adjusted Eurodollar Rate” and “Statutory Reserve Rate” in Section 1.1
hereof on the basis of which the rate of interest for such Loans for such
Interest Period is to be determined do not accurately reflect the cost to the
Banks of making or maintaining such Loans for such Interest Period; 


then Agent
shall give Borrower prompt notice thereof specifying the relevant Eurodollar
Loan and the relevant amounts or periods, and so long as such condition remains
in effect, the Banks shall be under no obligation to make additional Eurodollar
Loan and Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, prepay the Eurodollar Loans in
accordance with the terms of this Agreement. Determinations made under this Section
4.14 shall be made on a reasonable basis. 


          Section
4.15. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Bank or its Applicable Lending
Office to (a) honor its obligation to make Eurodollar Loans hereunder or (b)
maintain Eurodollar Loans hereunder, then such Bank shall promptly notify
Borrower (with a copy to Agent) thereof and such Bank’s obligation to make or
maintain Eurodollar Loans hereunder shall be suspended until such time as such
Bank may again make and maintain Eurodollar Loans (in which case the provisions
of Section 4.13 hereof shall be applicable). 


ARTICLE V.


Conditions Precedent


          Section
5.1. Initial Loan. The obligation of each Bank to make its initial
Loans, the Swingline Bank to make the initial Swingline Loans, and the
obligation of the Issuing Bank to issue Letters of Credit on the Closing Date,
if any, are subject to the condition precedent that Agent shall have received
on or before the day of any such Loan and on or before the Closing Date, all of
the following, each dated (unless otherwise indicated) the date hereof, in form
and substance reasonably satisfactory to Agent: 


                    (a)
Execution of this Agreement. A counterpart of this Agreement signed on
behalf of each party hereto. 


                    (b)
Other Loan Documents. The Revolving Note, the Security Agreement, and
the Guaranty duly executed by the parties thereto. 


                    (c)
Collateral. 


CREDIT AGREEMENT, Page 32 





                                        (i)
stock certificates, if any, representing (A) all of the outstanding shares of
Equity Interest of each Domestic Subsidiary owned by any Obligated Party and
(B) 65% of the aggregate outstanding voting power of each Foreign Subsidiary
owned by any Obligated Party as of the Closing Date and stock powers and
instruments of transfer, endorsed in blank, with respect to such stock
certificates; 


                                        (ii)
all documentation, including UCC financing statements, required by law or
reasonably requested by Agent to be executed, filed, registered or recorded to
create, perfect or protect the Liens intended to be created under the Loan
Documents; and 


                                        (iii)
copies of the financing statements (or similar documents) disclosed by the
results of a search of the Uniform Commercial Code (or equivalent) filings made
with respect to the each Obligated Party and in the jurisdictions contemplated
by the Security Agreement and, to the extent requested by Agent, copies of the
financing statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to Agent that the Liens indicated by such
financing statements (or similar documents) are permitted by Section 8.2
or have been released. 


                    (d)
Resolutions. Resolutions of the Board of Directors or members (as
applicable) of each Obligated Party certified by its Secretary or an Assistant
Secretary which authorize its execution, delivery, and performance of the Loan
Documents to which it is or is to be a party. 


                    (e)
Incumbency Certificate. A certificate of incumbency certified by the
Secretary or an Assistant Secretary of each Obligated Party certifying the name
of each of its officers (i) who are authorized to sign the Loan Documents to
which it is or is to be a party (including the certificates contemplated
herein) together with specimen signatures of each such officers and (ii) who
will, until replaced by other officers duly authorized for that purpose, act as
a Responsible Officer for the purposes of signing documentation and giving
notices and other communications in connection with the Loan Documents. 


                    (f)
Articles of Organization. The articles of organization of each Obligated
Party certified by the Secretary of State of the state of its organization (or
the other appropriate governmental officials of its jurisdiction of
organization) and dated as of a recent date. 


                    (g)
Governing Documents. The bylaws, limited partnership agreement and
operating agreement (as applicable) of each Obligated Party certified by its
Secretary or an Assistant Secretary. 


                    (h)
Governmental Certificates. Certificates of the appropriate government
officials (or other evidence reasonably satisfactory to Agent) as to the
existence, good standing, and foreign qualification of each Obligated Party,
all dated as of a recent date. 


                    (i)
Opinion of Counsel. Favorable opinions of legal counsel to the Obligated
Parties as to such matters as Agent may reasonably request. 


                    (j)
Insurance. Evidence that the insurance required by Section 7.5 is
in effect. 


                    (k)
Payoff of Compass Bank Debt. Evidence that all Debt of Borrower owing to
Compass Bank shall be paid in full and all Liens (other than Liens permitted by
Section 8.2) on the assets of any Obligated Party or shall be released,
contemporaneously with the funding of the initial Loans hereunder. 


                    (l)
Payoff of Zunicom Debt. Evidence that all Debt of Borrower owing to
Zunicom, Inc. shall be paid in full contemporaneously with the funding of the
initial Loans hereunder. 


CREDIT AGREEMENT, Page 33 





                    (m)
Borrowing Base Certificate; Minimum Borrowing Availability. A Borrowing
Base Certificate prepared as of November 30, 2009 in form and detail reasonably
acceptable to Agent. Upon giving effect to the initial funding of Loans and
issuance of Letters of Credit, and the payment of all fees and expenses
incurred in connection herewith as well as any payables stretched beyond their
customary payment practices, borrowing availability shall be at least
$5,000,000. 


                    (n)
Financial Statements. Copies of financial statements of Borrower and its
Subsidiaries, including, without limitation, (i) audited financial statements
for the fiscal year ended December 31, 2008, and (ii) unaudited financial
statements for the nine month period ended September 30, 2009. 


                    (o)
Costs and Expenses. Evidence that Borrower has paid all fees and
expenses (including, without limitation, the Origination Fee and all collateral
exam, appraisal, and legal fees) to be paid to Agent and Banks on the Closing
Date. 


                    (p)
Additional Documentation. Such additional approvals, opinions, or
documents as Agent may reasonably request. 


          Section
5.2. All Loans. The obligation of each Bank to make any Loan (including
the initial Loan), the obligation of the Swingline Bank to make Swingline
Loans, and the obligation of the Issuing Bank to issue Letters of Credit
hereunder are subject to the following additional conditions precedent: 


                    (a)
No Default. No Default shall have occurred and be continuing, or would
result from such Loan; 


                    (b)
Representations and Warranties. All of the representations and
warranties contained in Article VI hereof and in the other Loan Documents shall
be true and correct on and as of the date of such Loan, with the same force and
effect as if such representations and warranties had been made on and as of
such date except to the extent that such representations and warranties relate
specifically to another date; and 


                    (c)
Revolving Exposures. After giving effect to the requested Loan or Letter
of Credit, the aggregate principal amount of the Revolving Exposures do not
exceed the lesser of the Borrowing Base and the Revolving Commitment. 


Each notice of
borrowing, and each request for the issuance, amendment, renewal, or extension
of a Letter of Credit by Borrower hereunder, shall constitute a representation
and warranty by Borrower that the conditions precedent set forth in Sections
5.2(a), (b) and (c) have been satisfied (as of the date of
such borrowing or issuance, amendment, renewal, or extension of such Letter of
Credit, as applicable). 


ARTICLE VI.


Representations and Warranties


          To
induce Agent and the Banks to enter into this Agreement, each Obligated Party
represents and warrants to Agent and the Banks that: 


          Section
6.1. Corporate Existence. Each Obligated Party (a) is a corporation or
limited liability company duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its assets and carry on its business as
now being or as proposed to be conducted, and (c) is qualified to do business
in all jurisdictions in which the nature of its business makes such
qualification necessary, except where the failure to so qualify could not 


CREDIT AGREEMENT, Page 34





reasonably be
expected to have a Material Adverse Effect. Each Obligated Party has the
corporate power and authority to execute, deliver, and perform its respective
obligations under the Loan Documents to which it is or may become a party. 


          Section
6.2. Financial Statements. Borrower has delivered to Agent and the Banks
audited consolidated financial statements of Borrower and its Subsidiaries for
the fiscal year ended December 31, 2008 and unaudited financial statements of
Borrower and its Subsidiaries for the nine month period ended September 30,
2009. Such financial statements have been prepared in accordance with GAAP and
present fairly in all material respects (subject with respect to the fiscal
quarter financial statements to year end audit adjustments) the financial
condition of Borrower and its Subsidiaries as of the respective dates indicated
therein and the results of operations for the respective periods indicated
therein (subject to year end audit adjustments and the absence of footnotes).
None of Borrower or its Subsidiaries have any material contingent liabilities
or material liabilities for taxes, in each case, outside of the ordinary course
of their respective businesses, except as referred to or reflected in such
financial statements. There has been no material adverse change in the
business, condition (financial or otherwise), operations, prospects, or
properties of Borrower and its Subsidiaries since December 31, 2008. No Default
has occurred and is continuing. 


          Section
6.3. Corporate Action; No Breach. The execution, delivery, and
performance by each Obligated Party of the Loan Documents have been duly
authorized by all requisite action on the part of such Obligated Party and do
not and will not (a) violate or conflict with, or result in a breach of, or
require any consent under (i) the articles of incorporation, bylaws, articles
of formation, limited partnership agreement, operating agreement or other
governing documents of such Obligated Party, (ii) any applicable law, rule, or
regulation or any order, writ, injunction, or decree of any Governmental
Authority or arbitrator in any material respect, or (iii) any material
agreement or instrument to which Borrower or any Subsidiary is a party or by
which any of them or any of their property is bound or subject, or (b)
constitute a material default under any such agreement or instrument, or result
in the creation or imposition of any Lien (except as provided in the Loan
Documents) upon any of the revenues or assets of such Obligated Party (other
than Liens in favor of Agent for the benefit of the Secured Parties). 


          Section
6.4. Operation of Business. Each Obligated Party possess (or has a valid
right to use) all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, necessary to conduct its
respective businesses substantially as now conducted, except those that the
failure to so possess could not reasonably be expected to have a Material
Adverse Effect, and no Obligated Party is in violation of any valid rights of
others with respect to any of the foregoing except violations that could not
reasonably be expected to have a Material Adverse Effect. 


          Section
6.5. Litigation and Judgments. There is no action, suit, investigation,
or proceeding before or by any Governmental Authority or arbitrator pending or,
to the knowledge of any Obligated Party, threatened against or affecting such
Obligated Party that would, if adversely determined, have a Material Adverse
Effect. There are no outstanding judgments against any Obligated Party. 


          Section
6.6. Rights in Properties; Liens. Each Obligated Party has good title to
or valid leasehold interests in its respective properties and assets, real and
personal, including the properties, assets, and leasehold interests reflected
in the financial statements furnished to Agent and each Bank pursuant to Section
7.1, and none of the properties, assets, or leasehold interests of any
Obligated Party is subject to any Lien, except, as of the Closing Date, as
reflected on Schedule 8.2 and, at all times after Closing Date, as
permitted by Section 8.2. 


          Section
6.7. Enforceability. The Loan Documents to which each Obligated Party is
a party, when delivered, shall constitute the legal, valid, and binding
obligations of such Obligated Party, as 


CREDIT AGREEMENT, Page 35





applicable,
enforceable against such Obligated Party in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors’ rights and general
principles of equity. 


          Section
6.8. Approvals. All authorizations, approvals, and consents of, and all
filings or registrations with, any Governmental Authority or third party
necessary for the execution, delivery, or performance by an Obligated Party of
the Loan Documents to which each is or may become a party or for the validity
or enforceability thereof have been obtained or made. 


          Section
6.9. Debt. No Obligated Party has any Debt as of the Closing Date except
Debt to Agent and the Banks pursuant to the Loan Documents and the other Debt
described on Schedule 8.1 and, at all times after the Closing Date, as
permitted by Section 8.1. 


          Section
6.10. Taxes. Each Obligated Party has filed all material tax returns
(federal, state, and local) required to be filed, including all income,
franchise, employment, property, and sales tax returns, and has paid all of its
respective liabilities for taxes, assessments, governmental charges, and other
levies that are due and payable, other than those being contested in good faith
by appropriate proceedings diligently pursued for which adequate reserves in
accordance with GAAP have been established. No Obligated Party knows of any
pending investigation of any Obligated Party by any taxing authority with
respect to which it has not provided written notice thereof to Agent or of any
pending but unassessed tax liability of Obligated Party arising outside of the
ordinary course of business with respect to which it has not provided written
notice thereof to Agent. 


          Section
6.11. Margin Securities. No Obligated Party is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U, or X of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock. 


          Section
6.12. ERISA. Each Obligated Party is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event
nor a Prohibited Transaction has occurred and is continuing with respect to any
Plan. No notice of intent to terminate a Plan has been filed, nor has any Plan
been terminated. No circumstances exist which constitute grounds entitling the
PBGC to institute proceedings to terminate, or appoint a trustee to administer,
a Plan, nor has the PBGC instituted any such proceedings. Neither any Obligated
Party nor any ERISA Affiliate has completely or partially withdrawn from a
Multiemployer Plan. Each Obligated Party and each ERISA Affiliate have met
their minimum funding requirements under ERISA with respect to all of their
Plans. The present value of all vested benefits under each Plan do not exceed
the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
ERISA, by an amount that will exceed Five Hundred Thousand Dollars ($500,000).
Neither any Obligated Party nor any ERISA Affiliate has incurred any liability
to the PBGC under ERISA. 


          Section
6.13. Disclosure. All factual information furnished or made available by
or on behalf of any Obligated Party in writing to Agent or any Bank (including,
without limitation, all information contained in the Loan Documents) for
purposes of or in connection with this Agreement, the other Loan Documents or
any transaction contemplated herein or therein is true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. 


CREDIT AGREEMENT, Page 36 





          Section
6.14. Subsidiaries. As of the Closing Date, no Obligated Party has any
Subsidiaries other than those listed on Schedule 6.14 hereto. Schedule
6.14 sets forth each Subsidiary of any Obligated Party, the jurisdiction of
incorporation or organization of each such Subsidiary, the percentage of the
ownership of the outstanding voting stock (or other ownership interests) of
each such Subsidiary and the authorized, issued, and outstanding Equity
Interest of each such Subsidiary. Schedule 6.14 sets forth the
jurisdiction of organization for each Obligated Party. All of the outstanding
Equity Interest of each Subsidiary and Borrower has been validly issued, is
fully paid, and is nonassessable. There are no outstanding subscriptions,
options, warrants, calls, or rights (including preemptive rights) to acquire,
and no outstanding securities or instruments convertible into, Equity Interest
of any Subsidiary except as disclosed on Schedule 6.14. As of the
Closing Date, all of the outstanding Equity Interest of each Subsidiary has
been pledged to Agent. 


          Section
6.15. Defaults under other Agreements. No Obligated Party is a party to
any indenture, loan, or credit agreement, or to any lease or other agreement or
instrument, or subject to any charter or corporate restriction, that could
reasonably be expected to have a Material Adverse Effect. No Obligated Party is
in default in any respect in the performance, observance, or fulfillment of any
of the obligations, covenants, or conditions contained in any agreement or
instrument to which it is a party other than defaults which will not have a
Material Adverse Effect. 


          Section
6.16. Compliance with Laws. No Obligated Party is in violation in any
material respect of any applicable law, rule, regulation, order, or decree of
any Governmental Authority or arbitrator, except where the violation thereof
could not reasonably be expected to have a Material Adverse Effect. No
Obligated Party is subject to any law, regulation or list of any Governmental
Authority (including, without limitation, the U.S. Office of Foreign Asset
Control list) that prohibits or limits a Bank from making any advance or
extension of credit to Borrower or from otherwise conducting business with
Borrower or any other Obligated Party. 


          Section
6.17. Investment Company Act. No Obligated Party is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. 


          Section
6.18. Environmental Matters. 


                    (a)
The Obligated Parties and all of their respective properties, assets, and
operations are in full compliance with all Environmental Laws except where any
noncompliance could not reasonably be expected to have a Material Adverse
Effect. No Obligated Party is aware of, nor has any Obligated Party received
written notice of, any past, present, or future conditions, events, activities,
practices, or incidents which may interfere with or prevent the compliance or
continued compliance of the Obligated Parties with all Environmental Laws
except where any noncompliance could not reasonably be expected to have a
Material Adverse Effect; 


                    (b)
Each Obligated Party has obtained all permits, licenses, and authorizations
that are required under applicable Environmental Laws, and all such permits are
in good standing and each Obligated Party is in compliance with all of the
terms and conditions of such permits except where any failure to obtain, lack of
good standing or noncompliance could not reasonably be expected to have a
Material Adverse Effect; 


                    (c)
No Hazardous Materials are present at such properties except in compliance with
Environmental Laws, and to the knowledge of the Obligated Parties, no Hazardous
Materials have been used, generated, stored, transported, disposed of on, or
Released from any of the properties or assets of any Obligated Party except in
compliance with Environmental Laws. The use which the Obligated Parties make
and intend to make of their respective properties and assets will not result in
the use, generation, 


CREDIT AGREEMENT, Page 37





storage,
transportation, accumulation, disposal, or Release of any Hazardous Material
on, in, or from any of their properties or assets except in compliance with
Environmental Laws; 


                    (d)
Neither any Obligated Party nor any of its currently or previously owned or
leased properties or operations is subject to any outstanding or, to the best
of its knowledge, threatened order from or agreement with any Governmental
Authority or other Person or subject to any judicial or administrative
proceeding with respect to (i) failure to comply with Environmental Laws, (ii)
Remedial Action, or (iii) any Environmental Liabilities arising from a Release
or threatened Release; 


                    (e)
No Obligated Party is a treatment, storage, or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., regulations thereunder or any
comparable provision of state law. The Obligated Parties are in compliance with
all applicable financial responsibility requirements of all Environmental Laws;



                    (f)
No Obligated Party has filed or failed to file any notice required under
applicable Environmental Law reporting a Release; and 


                    (g)
No Lien arising under any Environmental Law has attached to any owned real
property or revenues of any Obligated Party. 


          Section
6.19. Solvency. After giving effect to the initial Loans advanced
hereunder, each of the Obligated Parties: (a) owns and will own assets, the
fair saleable value of which are (i) greater than the total amount of its
liabilities (including contingent liabilities) and (ii) greater than the amount
that will be required to pay probable liabilities of then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to it; (b) has capital that is not
unreasonably small in relation to its business as presently conducted; and (c)
does not intend to incur and does not believe that it will incur debts beyond
its ability to pay such debts as they become due. 


ARTICLE VII.


Positive Covenants


          Each
Obligated Party covenants and agrees that, until the Loan Obligations and the
Hedging Obligations have been Fully Satisfied, such Obligated Party will, and
will cause each other Obligated Party to, perform and observe the following
positive covenants: 


          Section
7.1. Reporting Requirements. Borrower will furnish to Agent and each
Bank: 


                    (a)
Annual Financial Statements. As soon as available, and in any event
within ninety (90) days after the end of each fiscal year of Borrower,
beginning with the fiscal year ending on December 31, 2009, a copy of the
annual audit report of Borrower and its Subsidiaries for such fiscal year
containing, on both a consolidated and consolidating basis, balance sheets and
statements of income, retained earnings, and cash flow, in each case as at the
end of such fiscal year and for the fiscal year then ended, in each case
setting forth in comparative form the figures for the preceding fiscal year,
all in reasonable detail and audited on an unqualified basis by an independent
certified public accountants of recognized standing reasonably acceptable to
Agent, to the effect that such report has been prepared in accordance with
GAAP; 


                    (b)
Monthly Financial Statements. Within thirty (30) days after the end of
each fiscal month of Borrower, beginning with the fiscal month ending on
November 30, 2009, a copy of an unaudited financial report of Borrower and its
Subsidiaries as of the end of such fiscal month and a balance sheet and
statements of income, retained earnings, and cash flow, in each case on both a
consolidated and 


CREDIT AGREEMENT, Page 38





consolidating
basis and setting forth in comparative form the figures for the corresponding
period of the preceding fiscal year and a comparison to the annual budget for
such month, all in reasonable detail certified by a Responsible Officer of
Borrower to have been prepared in accordance with GAAP and to fairly present in
all material respects the financial condition and results of operations of
Borrower and the Subsidiaries, on a consolidated and consolidating basis, at
the date and for the periods indicated therein (subject in each case to year
end audit adjustments and the absence of footnotes); 


                    (c)
Compliance Certificate. Concurrently with the delivery of the financial
statements referred to in Section 7.1(a) and Section 7.1(b) when
such fiscal month coincides with a fiscal quarter end, a Compliance
Certificate; 


                    (d)
Projections. Within thirty (30) days after the beginning of each fiscal
year, beginning with the fiscal year ending on December 31, 2010, Borrower will
deliver projections of balance sheets, results of operations, and cash flows of
Borrower and its Subsidiaries for the next fiscal year in form and detail
reasonably acceptable to Agent; 


                    (e)
Borrowing Base Certificate. As soon as available, and in any event
within thirty (30) days after the end of each fiscal month, a Borrowing Base
Certificate, in form and detail satisfactory to Agent, certified by a
Responsible Officer of Borrower; 


                    (f)
Schedule of Accounts Receivable. Within thirty (30) days after the end
of each fiscal month of Borrower, a schedule of accounts listing all accounts
of each Borrowing Base Party as of the last Business Day of such fiscal month
setting forth (i) the name of each account debtor together with account
balances detailed by invoice number, amount (and any applicable rebate or
discount), invoice date and terms, (ii) aging of all accounts setting forth
accounts thirty (30) days old or less, accounts over thirty (30) days but less
than sixty (60) days old, accounts over sixty (60) days old but less than
ninety (90) days old, and accounts over ninety (90) days old, and (iii) as to
the month-end schedule, a reconciliation of the schedule of accounts to such
Borrowing Base Party’s month-end general ledger and monthly financial
statement; 


                    (g)
Schedule of Accounts Payable. Within thirty (30) days of the end of each
fiscal month and at such other times as may be requested by Agent, as of the
month then ended, a schedule and aging of accounts payable of each Borrowing
Base Party in form and detail reasonably acceptable to Agent; 


                    (h)
Schedule of Inventory. Within thirty (30) days after the end of each
fiscal month of Borrower, (i) a schedule of each Borrowing Base Party’s
Inventory, based upon such Borrowing Base Party’s perpetual Inventory, as of
the last Business Day of such fiscal month, (ii) an Inventory aging report, in
form and substance reasonably acceptable to Agent, (iii) identification of all
leased engines, (iv) a monthly Inventory turn report and gross margins, in form
and substance reasonably satisfactory to Agent, and (v) a reconciliation of
each Borrowing Base Party’s perpetual Inventory to such Borrowing Base Party’s
general ledger setting forth all unreconciled variances for such fiscal month
end; 


                    (i)
Notice of Litigation. Promptly after the commencement thereof, notice of
all actions, suits, and proceedings before any Governmental Authority or
arbitrator affecting Borrower or any Subsidiary which, if determined adversely
to Borrower or such Subsidiary, could reasonably be expected to have a Material
Adverse Effect; 


                    (j)
Notice of Default. As soon as possible and in any event within five (5)
days after a Responsible Officer has knowledge of the occurrence of any
Default, a written notice setting forth the details of such Default and the
action that each Obligated Party has taken and proposes to take with respect
thereto; 


CREDIT AGREEMENT, Page 39 





                    (k)
ERISA Reports. If requested by Agent, promptly after the filing or
receipt thereof, copies of all reports, including annual reports, and notices
which any Obligated Party files with or receives from the PBGC or the U.S.
Department of Labor under ERISA; and as soon as possible and in any event
within five (5) Business Days after any Obligated Party knows or has reason to
know that any Reportable Event or Prohibited Transaction has occurred with
respect to any Plan or that the PBGC or any Obligated Party has instituted or
will institute proceedings under Title IV of ERISA to terminate any Plan, a
certificate of a Responsible Officer of Borrower setting forth the details as
to such Reportable Event or Prohibited Transaction or Plan termination and the
action that Borrower proposes to take with respect thereto; 


                    (l)
Reports to Other Banks. Promptly after the furnishing thereof, copies of
any statement or report furnished to any other provider of Debt pursuant to the
terms of any indenture, loan, or credit or similar agreement and not otherwise
required to be furnished to Agent and the Banks pursuant to any other clause of
this Section; 


                    (m)
Notice of Material Adverse Effect. As soon as possible and in any event
within five (5) days after any Obligated Party has knowledge of the occurrence
thereof, written notice of any matter that could reasonably be expected to have
a Material Adverse Effect; 


                    (n)
Management Letters. Promptly upon receipt thereof, a copy of any final
management letter or written report submitted to Borrower or any Subsidiary by
independent certified public accountants in connection with the audit of any
financial statements of Borrower and its Subsidiaries; 


                    (o)
Proxy Statements, etc. As
soon as available, one copy of each financial statement, report, notice or
proxy statement sent by any Obligated Party to its stockholders generally and
one copy of each regular, periodic, or special report, registration statement,
or prospectus filed by any Obligated Party with any securities exchange or the
Securities and Exchange Commission or any successor agency; and 


                    (p)
General Information. Promptly, such other information concerning the
business of any Obligated Party as Agent or any Bank may from time to time
reasonably request.


          Section
7.2. Maintenance of Existence; Conduct of Business. Each Obligated Party
will, and will cause each other Obligated Party to, preserve and maintain (a)
its existence (except as permitted by Section 8.3) and (b) all of its
privileges, licenses, permits, franchises, qualifications, and rights that are
necessary or desirable in the ordinary conduct of its business. Each Obligated
Party will, and will cause each other Obligated Party to, conduct its business
in an orderly and efficient manner in accordance with good business practices. 


          Section
7.3. Maintenance of Properties. Each Obligated Party will, and will
cause each other Obligated Party to, maintain, keep, and preserve in good
working order and condition (exclusive of ordinary wear, tear and casualty) all
of its material properties necessary in the conduct of its business. 


          Section
7.4. Taxes and Claims. Each Obligated Party will, and will cause each
other Obligated Party to, pay or discharge at or before maturity or before
becoming delinquent (or otherwise in the ordinary course of Borrower’s
business) (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all valid and
lawful claims for labor, material, and supplies, which, if unpaid, would become
a Lien upon any of its property; provided, however, that neither
Borrower nor any Subsidiary shall be required to pay or discharge any tax,
levy, assessment, governmental charge or claims which is being contested in
good faith by appropriate proceedings diligently pursued, and for which
adequate reserves in accordance with GAAP have been established. 


CREDIT AGREEMENT, Page 40 





          Section
7.5. Insurance. Each Obligated Party will, and will cause each other
Obligated Party to, maintain insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as are usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which such Obligated Party operates, provided
that in any event each Obligated Party will maintain property insurance,
comprehensive general liability insurance and professional liability insurance
reasonably satisfactory to Agent. Each general liability insurance policy shall
name Agent as additional insured, each insurance policy covering Collateral
shall name Agent as loss payee and each such policy shall provide that such
policy will not be canceled or materially changed without thirty (30) days
prior written notice to Agent. 


          Section
7.6. Inspection Rights. During normal business hours with reasonable
prior notice, each Obligated Party will, and will cause each other Obligated
Party to, permit representatives of Agent to examine, copy, and make extracts
from its books and records, to visit and inspect its properties, and to discuss
its business, operations, and financial condition with its officers, employees,
and independent certified public accountants. At any time a Default exists, the
prior notice described in the first sentence of this Section 7.6 shall
not be applicable. The representatives of any Bank may accompany Agent during
any examination, visit, inspection or discussions under this Section 7.6.



          Section
7.7. Keeping Books and Records. Each Obligated Party will, and will
cause each other Obligated Party to, maintain proper books of record and
account in which full, true, and correct entries in conformity with GAAP shall
be made of all dealings and transactions in relation to its business and
activities. 


          Section
7.8. Compliance with Laws. Each Obligated Party will, and will cause
each other Obligated Party to, comply with all applicable laws (including,
without limitation, all Environmental Laws and ERISA), rules, regulations,
orders, and decrees of any Governmental Authority or arbitrator except where
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect. 


          Section
7.9. Compliance with Agreements. Each Obligated Party will, and will
cause each other Obligated Party to, comply in all material respects with all
agreements, contracts, and instruments binding on it or affecting its
properties or business, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect. 


          Section
7.10. ERISA. Each Obligated Party will, and will cause each other
Obligated Party to, comply with all minimum funding requirements and all other
requirements of ERISA, if applicable, so as not to give rise to any liability
which will have a Material Adverse Effect. 


          Section
7.11. Additional Subsidiaries. If any additional Subsidiary of Borrower
is formed or acquired after the Closing Date, Borrower will promptly notify
Agent thereof and (a) if such Subsidiary is a Domestic Subsidiary that is not
owned by a Foreign Subsidiary, Borrower will cause such Subsidiary to execute a
Guaranty and a Subsidiary Joinder Agreement within fifteen (15) Business Days
after such Subsidiary is formed or acquired and promptly take such actions to
create and perfect Liens on such Subsidiary’s assets to secure the Obligations
as Agent or the Required Banks shall reasonably request and (b) if any Equity
Interest in such Subsidiary is owned by or on behalf of Borrower or any other
Obligated Party, Borrower will cause such Equity Interests to be pledged
pursuant to the Security Agreement within ten (10) Business Days after such
Subsidiary is formed or acquired (except that, if such Subsidiary is a Foreign
Subsidiary, the Equity Interests issued by such Subsidiary to be pledged
pursuant to the Security Agreement shall be limited to Equity interests
representing 65% of the aggregate outstanding voting power of such Subsidiary).



CREDIT AGREEMENT, Page 41 





          Section
7.12. Further Assurances. 


                    (a)
Each Obligated Party will, and will cause each Domestic Subsidiary that is not
owned by a Foreign Subsidiary to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which Agent may reasonably request, to effectuate
the transactions contemplated by the Loan Documents or to grant, preserve,
protect or perfect the Liens created or intended to be created by the Security
Agreement or the validity or priority of any such Lien, all at the expense of
Borrower. Borrower also agrees to provide to Agent, from time to time upon a
reasonable request, evidence reasonably satisfactory to Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Agreement. 


                    (b)
If any material assets (including any material real property or improvements
thereto or any interest therein) are acquired by Borrower or any other
Obligated Party after the Closing Date (other than assets constituting
Collateral under the Security Agreement that become subject to the Lien of the
Security Agreement upon acquisition thereof), Borrower will promptly notify
Agent and the Banks thereof, and, if requested by Agent or the Required Banks,
Borrower will cause such assets to be subjected to a Lien securing the
Obligations and will take, and cause the other Obligated Parties to take, such
actions as shall be reasonably requested in writing by Agent to grant and
perfect such Liens. 


          Section
7.13. Post Closing Covenants. 


                    (a)
On or before February 1, 2009, each Obligated Party will obtain and deliver to
the Agent endorsements to the insurance policies of the Obligated Parties, in
each case in form and substance reasonably acceptable to the Agent. Unless the
Agent shall agree otherwise, the endorsements shall, among other things, (i)
show the Agent as loss payee or additional insured as applicable and (ii)
require 30 days prior written notice to the Agent in the event of cancellation
of or a material change to the policy for any reason whatsoever. 


                    (b)
To induce the Banks to establish the interest rates provided for herein, each
Obligated Party will use Wells Fargo as its principal depository bank and each
Obligated Party covenants and agrees to maintain Wells Fargo as its principal
depository bank, including for the maintenance of business, cash management,
operating and administrative deposit accounts. All of the Obligated Parties’
deposit accounts shall be located at Wells Fargo within sixty (60) days of the
date hereof. 


ARTICLE VIII.


Negative Covenants


          Each
Obligated Party covenants and agrees that, until the Loan Obligations and
Hedging Obligations have been Fully Satisfied, such Obligated Party will, and
will cause each other Obligated Party to, perform and observe the following
negative covenants: 


          Section
8.1. Debt. Each Obligated Party will not, and will not permit any other
Obligated Party to, incur, create, assume, or permit to exist any Debt, except:



                    (a)
Debt to Agent and Banks pursuant to the Loan Documents; 


                    (b)
existing Debt described on Schedule 8.1 and any refinancings,
refundings, renewals or extensions thereof that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or decrease the
weighted average life to maturity thereof; 


CREDIT AGREEMENT, Page 42 





                    (c)
purchase money Debt (including Capital Lease Obligations existing on the
Closing Date and any additional Capital Lease Obligations incurred after the
Closing Date) not to exceed Two Hundred and Fifty Thousand Dollars ($250,000)
in the aggregate for all Obligated Parties at any time outstanding secured by
purchase money Liens permitted by Section 8.2(g); 


                    (d)
unsecured intercompany Debt owed by an Obligated Party to another Obligated
Party; 


                    (e)
Debt constituting obligations to reimburse worker’s compensation insurance
companies for claims paid by such companies on Borrower’s behalf in accordance
with the policies issued to Borrower; 


                    (f)
Debt arising in connection with Hedging Agreements entered into with any Bank
or Affiliate of a Bank in the ordinary course of business to enable Borrower or
a Subsidiary (i) to limit the market risk of holding currency in either the
cash or futures markets or (ii) to fix or limit Borrower’s or any Subsidiary’s
interest expense, none of which Hedging Agreements may be of a speculative
nature; 


                    (g)
Debt not otherwise permitted by this Section 8.1 which has been
subordinated to the Obligations on terms satisfactory to Agent and pursuant to
documentation satisfactory to Agent; and 


                    (h)
unsecured Debt of Borrower or any Subsidiary not otherwise permitted by the
foregoing clauses (a) through (g), which in the aggregate for
Borrower and all Subsidiaries does not exceed Fifty Thousand Dollars ($50,000)
at any time outstanding. 


          Section
8.2. Limitation on Liens and Restrictions on Subsidiaries. Each
Obligated Party will not, and will not permit any other Obligated Party to,
incur, create, assume, or permit to exist any Lien upon any of its property,
assets, or revenues, whether now owned or hereafter acquired, other than: 


                    (a)
Existing Liens disclosed on Schedule 8.2 hereto and extensions and
renewals of any such Lien provided that (i) such extended or renewed Lien shall
not apply to any other property or asset of such Obligated Party and (ii) such
extensions and renewals shall not increase the outstanding principal amount of
the obligations secured by such Lien; 


                    (b)
Liens in favor of Agent for the benefit of itself and the Secured Parties
pursuant to the Loan Documents; 


                    (c)
Encumbrances consisting of easements, covenants, conditions, building codes,
land use laws, zoning restrictions, or other restrictions on the use of real
property that do not (individually or in the aggregate) materially affect the
value of the assets encumbered thereby or materially impair the ability of Borrower
or the Subsidiaries to use such assets in their respective businesses, and none
of which is violated in any material respect by existing or proposed structures
or land use; 


                    (d)
Liens for taxes, assessments, or other governmental charges that are not
delinquent or which are being contested in good faith and for which adequate
reserves have been established in accordance with GAAP; 


                    (e)
Liens of mechanics, materialmen, warehousemen, repairmen, carriers, landlords, or
other similar statutory Liens securing obligations that are not yet due and are
incurred in the ordinary course of business or which are being contested in
good faith and for which adequate reserves have been established in accordance
with GAAP; 


CREDIT AGREEMENT, Page 43 





                    (f)
Liens resulting from good faith deposits to secure payments of workmen’s
compensation or other social security programs or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases and
contracts; 


                    (g)
Liens for purchase money obligations and Capital Lease Obligations; provided
that any such Lien encumbers only the asset so purchased or subject to such
capital lease and the Debt secured is permitted under Section 8.1(c); 


                    (h)
Liens related to any attachment or judgment not constituting an Event of
Default; and 


                    (i)
Liens arising from filing UCC financing statements regarding leases permitted
by this Agreement. 


No Obligated
Party shall enter into or assume any agreement (other than the Loan Documents)
prohibiting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired; provided that, in
connection with the creation of purchase money Liens or Capital Lease
Obligations, an Obligated Party may agree that it will not permit any other
Liens to encumber the asset subject to such purchase money Lien or such capital
lease. Each Obligated Party will not, and will not permit any other Obligated
Party directly or indirectly to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on
the ability of any Obligated Party to: (1) pay dividends or make any other distribution
on any Equity Interest owned by such Obligated Party; (2) subject to
subordination provisions, pay any Debt owed to any Obligated Party; (3) make
loans or advances to any other Obligated Party; or (4) transfer any of its
property or assets to any other Obligated Party (other than assets subject to
purchase money Liens or Capital Lease Obligations). 


          Section
8.3. Mergers, etc. Each
Obligated Party will not, and will not permit any other Obligated Party to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing (a) any Subsidiary may merge into Borrower in a
transaction in which Borrower is the surviving corporation and (b) any
Subsidiary that is not a Obligated Party may liquidate or dissolve if its
assets are transferred to an Obligated Party and Borrower determines in good
faith that such liquidation or dissolution is in the best interests of Borrower
and is not materially disadvantageous to the Banks. 


          Section
8.4. Restrictions on Dividends and other Distributions. Each Obligated
Party will not, and will not permit any other Obligated Party to, directly or
indirectly declare, order, pay, make or set apart any sum for (a) any dividend
or other distribution, direct or indirect, on account of any shares of any
class of stock of Borrower or any Subsidiary now or hereafter outstanding other
than: (i) dividends or other distributions payable solely in additional stock
or other Equity Interests, and (ii) dividends or other distributions made or
paid by Borrower’s Subsidiaries to Borrower; or (b) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
(or other Equity Interest) of Borrower or any Subsidiary now or hereafter
outstanding. 


          Section
8.5. Investments. Each Obligated Party will not, and will not permit any
other Obligated Party to, make or permit to remain outstanding any advance,
loan, other extension of credit, or capital contribution to or investment in
any Person, or purchase or own any stock, bonds, notes, debentures, or other
securities of any Person, or be or become a joint venturer with or partner of
any Person, (collectively, “Investments”), except each Obligated Party
may make the following Investments: 


CREDIT AGREEMENT, Page 44 





                    (a)
readily marketable direct obligations of the United States of America or any
agency thereof with maturities of one (1) year or less from the date of
acquisition; 


                    (b)
certificates of deposit, banker’s acceptances and time deposits with maturities
of one (1) year or less from the date of acquisition issued by any commercial
bank operating in the United States of America or any United States branch of a
bank that is organized under the laws of another jurisdiction having a combined
capital and surplus and undivided profits in excess of $250,000,000; 


                    (c)
commercial paper or bonds of a domestic issuer if at the time of purchase such
paper or bonds are rated in one of the two highest rating categories of
Standard and Poor’s Corporation or Moody’s Investors Service, Inc.; 


                    (d)
trade and customer accounts receivable for services rendered in the ordinary
course of business and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors; 


                    (e)
shares of any mutual fund registered under the Investment Company Act of 1940,
as amended, which invests solely in Investments of the type described in clauses
(b), (c), (d) and (i) of this Section 8.5;


                    (f)
existing Investments described on Schedule 8.5 hereto; 


                    (g)
loans, advances, guarantees and other extensions of credit to Subsidiaries made
in accordance with the restrictions set forth in Section 8.1(b); provided that,
at the time any such loan, advance or other extension of credit is made, no
Default exists or would result therefrom; 


                    (h)
Investments in corporate debt securities maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, a rating of
BBB- or better by Standard and Poor’s Corporation or Baa3 or better by Moody’s
Investors Service, Inc.; and 


                    (i)
money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a–7 under the Investment Company Act of 1940,
(ii) are rated AAA by Standard and Poor’s Corporation and Aaa by Moody’s
Investors Service, Inc., and (iii) have portfolio assets of at least Five
Million Dollars ($5,000,000). 


          Section
8.6. Transactions With Affiliates. Each Obligated Party will not, and
will not permit any other Obligated Party to, enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate of an Obligated Party, except
in the ordinary course of and pursuant to the reasonable requirements of such
Obligated Party’s business and upon fair and reasonable terms no less favorable
to such Obligated Party than would be obtained in a comparable arms-length
transaction with a Person not an Affiliate of such Obligated Party. 


          Section
8.7. Disposition of Assets. Each Obligated Party will not, and will not
permit any other Obligated Party to, sell, lease, assign, transfer, or
otherwise dispose of any of its assets, except (a) dispositions of Inventory in
the ordinary course of business and dispositions of property to the extent such
property is exchanged for credit against the purchase price of similar
replacement property; (b) if no Event of Default exists or would result
therefrom dispositions of unnecessary, obsolete, excess, damaged, no longer
useful or worn out equipment; (c) the sale, discount or transfer of delinquent
notes or accounts receivable in the ordinary course of business for purposes of
collection for fair value; (d) if no Default exists or would result therefrom,
dispositions resulting from mergers and liquidations permitted by Section
8.3 or sales of Equity Interest permitted by Section 8.4; and (e) if
no Default exists or would result therefrom, dispositions of assets not
otherwise permitted by this Section 8.7, provided the aggregate book 


CREDIT
AGREEMENT, Page 45 






value of all
such assets disposed of in any fiscal year does not exceed Two Hundred Fifty
Thousand Dollars ($250,000). 


          Section
8.8. Lines of Business. Each Obligated Party will not, and will not
permit any other Obligated Party to, engage in any line or lines of business
activity other than the businesses in which it is engaged on the Closing Date
and any businesses which are similar or related to those engaged in by the
Obligated Parties on the Closing Date. 


          Section
8.9. Sale and Leaseback. Each Obligated Party will not, and will not
permit any other Obligated Party to, enter into any arrangement with any Person
pursuant to which it leases from such Person real or personal property that has
been or is to be sold or transferred, directly or indirectly, by it to such
Person. 


          Section
8.10. Prepayment of Debt. Each Obligated Party will not, and will not
permit any other Obligated Party to, prepay or optionally redeem any Debt other
than the Obligations. 


          Section
8.11. Change in Fiscal Year. Each Obligated Party will not, and will not
permit any other Obligated Party to, change its fiscal year. 


ARTICLE IX.


Financial Covenants


          Each
Obligated Party covenants and agrees that, until the Loan Obligations and the
Hedging Obligations have been Fully Satisfied, such Obligated Party will, and
will cause each other Obligated Party to, perform and observe the following
financial covenants: 


          Section
9.1. Leverage Ratio. As of the last day of each fiscal quarter, each
Obligated Party shall not permit the ratio of Total Liabilities of Borrower and
its Subsidiaries to the Tangible Net Worth of Borrower and its Subsidiaries to
be greater than (a) 2.50 to 1.00 as of any date of determination on or before
December 31, 2010 and (b) 2.00 as of any date of determination after January 1,
2011. 


	
  

 	
  

 	
  

 
	
  

 	
           “Total
 Liabilities” means, as of any date of determination, the aggregate amount
 of all liabilities of Borrower and its Subsidiaries at such date, determined
 on a consolidated basis in accordance with GAAP. 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
           “Tangible
 Net Worth” means, as of any date of determination, the sum of: (a)
 stockholder’s equity of Borrower and its Subsidiaries (determined on a
 consolidated basis in accordance with GAAP), plus
 (b) any Debt of Borrower and its Subsidiaries which has been subordinated to
 the Obligations on terms satisfactory to Agent, less (c) all intangible assets of Borrower and its
 Subsidiaries (determined on a consolidated basis in accordance with GAAP), less (d) all loans and advances due to
 Borrower and its Subsidiaries from stockholders, employees and Affiliates of
 such Person. 

 	
  

 



          Section
9.2. Fixed Charge Coverage Ratio. As of the last day of each fiscal
quarter, each Obligated Party shall not permit the ratio of (a) EBITDA of
Borrower and its Subsidiaries for the four fiscal quarters then ended less taxes paid or payable in cash by such
Persons during such period (determined on a consolidated basis in accordance
with GAAP) to (b) Fixed Charges of Borrower and its Subsidiaries for such
period (determined on a consolidated basis in accordance with GAAP) to be less
than the ratio set forth below for the applicable date of determination: 


CREDIT
AGREEMENT, Page 46









	
  

 	
  

 	
  

 	
  

 
	
 Time Period

 	
  

 	
 Minimum Fixed

 Charge Coverage

 Ratio

 	
  

 
	

 


 	
  

 	

 


 	
  

 
	
 Closing Date
 through and including December 31, 2011

 	
  

 	
 1.50 to 1.00

 	
  

 
	
 January 1,
 2012 through and including the Revolving Termination Date

 	
  

 	
 1.75 to 1.00

 	
  

 






	
  

 	
  

 	
  

 
	
  

 	
           “EBITDA”
 means, for any period, the total of the following each calculated without
 duplication on a consolidated basis for such period in accordance with GAAP:
 (a) Consolidated Net Income; plus
 (b) interest expense (including the interest portion of Capital Lease
 Obligations) deducted in determining Consolidated Net Income; plus (c) any provision for (or less any
 benefit from) income or franchise taxes deducted in determining Consolidated
 Net Income; plus (d)
 amortization and depreciation expense deducted in determining Consolidated
 Net Income; plus (e) lease payments
 deducted in determining Consolidated Net Income plus (f) extraordinary, nonrecurring, nonoperating or
 noncash losses deducted (or less any such gains added) in determining
 Consolidated Net Income. 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
           “Fixed
 Charges” means, for any period, without duplication, cash interest
 expense, plus scheduled
 principal payments on Debt made during such period, plus expenses paid in cash in connection
 with settlements of litigation, all calculated for Borrower and its
 Subsidiaries on a consolidated basis in accordance with GAAP. 

 	
  

 



          Section
9.3. Net Income. Each Obligated Party shall not permit Consolidated Net
Income of Borrower and its Subsidiaries, calculated as of the last day of each
fiscal quarter for the fiscal quarter then ended, to be less than $0.00 for any
two (2) consecutive fiscal quarters. Each Obligated Party shall not permit
Consolidated Net Income of Borrower and its Subsidiaries, calculated as of the
last day of: (a) the fiscal quarter ending December 31, 2009 for the fiscal quarter
then ended, to be less than $0.00 or (b) each fiscal year for the fiscal year
then ended, beginning with the fiscal year beginning January 1, 2010, to be
less than $0.00. 


          Section
9.4. Capital Expenditures. Each Obligated Party shall not permit the
aggregate Capital Expenditures of Borrower and its Subsidiaries to exceed
$750,000 during any fiscal year, commencing with the fiscal year beginning
January 1, 2010. 


ARTICLE X.


Default


          Section
10.1. Events of Default. Each of the following shall be deemed an “Event
of Default”:


                    (a)
Borrower shall fail to pay when due any principal, interest, fees, or other
Loan Obligations or Hedging Obligations or any part thereof. 


                    (b)
Any representation, warranty, or certification made or deemed made by any
Obligated Party (or any of their respective officers) in any Loan Document or
in any certificate, report, notice, or financial statement furnished at any
time in connection with any Loan Document shall be false, misleading, or
erroneous in any material respect when made or deemed to have been made
pursuant to Section 5.2. 


                    (c)
Any Obligated Party shall fail to perform, observe or comply with any covenant,
agreement, or term contained in Sections 7.1(j), 7.5 or 7.6,
Article VIII, or Article IX of this Agreement or 


CREDIT
AGREEMENT, Page 47





(ii) any
covenant, agreement, or term contained in any Loan Document relating to the
creation, perfection or protection of the Liens required to be granted to
secure any of the Obligations under the Loan Documents. 


                    (d)
Any Obligated Party shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in any Loan Document (other than
covenants to pay the Loan Obligations and Hedging Obligations and the covenants
described in Section 10.1(c)) or any Hedging Agreement with any Secured
Party and such failure shall continue for a period of ten (10) days after the
earlier of (i) the date Agent or any Bank provides Borrower with notice thereof
or (ii) the date Borrower should have, with the exercise of reasonable
diligence, notified Agent thereof in accordance with Section 7.1(j). 


                    (e)
Any Obligated Party shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee, examiner,
liquidator, or the like of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the United States Bankruptcy Code (as now
or hereafter in effect, the “Bankruptcy Code”), (iv) institute any
proceeding or file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, liquidation, dissolution,
winding-up, or composition or readjustment of debts, (v) fail to controvert in
a timely and appropriate manner, or acquiesces in writing to, any petition
filed against it in an involuntary case under the Bankruptcy Code, (vi) admit in
writing its inability to, or be generally unable to, pay its debts as such
debts become due, or (vii) take any entity action for the purpose of effecting
any of the foregoing. 


                    (f)
A proceeding or case shall be commenced, without the application, approval, or
consent of any Obligated Party, in any court of competent jurisdiction, seeking
(i) its reorganization, liquidation, dissolution, arrangement, or winding-up,
or the composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator, or the like of any such
Obligated Party or of all or any substantial part of its property, or (iii)
similar relief in respect of any such Obligated Party under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of sixty (60) or
more days, or an order for relief against any Obligated Party shall be entered
in an involuntary case under the Bankruptcy Code. 


                    (g)
Any Obligated Party shall, within a period of sixty (60) days after the commencement
thereof, fail to discharge, vacate, bond or procure a stay of execution of any
attachment, sequestration, forfeiture, or similar proceeding or proceedings
involving an aggregate amount in excess of Five Hundred Thousand Dollars
($500,000) against any of its assets or properties. 


                    (h)
A final judgment or judgments for the payment of money in excess of Five
Hundred Thousand Dollars ($500,000) in the aggregate shall be rendered by a
court or courts against any Obligated Party and the same shall not be
discharged (or provision shall not be made for such discharge), vacated, bonded
or a stay of execution thereof shall not be procured, within thirty (30) days
from the date of entry thereof, and Obligated Party shall not, within said period
of thirty (30) days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal. 


                    (i)
Any Obligated Party shall fail to pay when due (after giving effect to any
grace periods) any principal of or interest on any Debt (other than the Loan
Obligations and Hedging Obligations) if the aggregate principal amount of the
affected Debt equals or exceeds Five Hundred Thousand Dollars ($500,000) (other
than the Loan Obligations and Hedging Obligations), or the maturity of any such
Debt shall have been accelerated, or any such Debt shall have been required to
be prepaid prior to the stated maturity thereof or any event shall have
occurred with respect to any Debt in the aggregate 


CREDIT
AGREEMENT, Page 48





principal
amount equal to or in excess of Five Hundred Thousand Dollars ($500,000) that
permits (in each case, after giving effect to any grace period) any holder or
holders of such Debt or any Person acting on behalf of such holder or holders
to accelerate the maturity thereof or require any such prepayment. 


                    (j)
This Agreement or any other Loan Document shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability
thereof shall be contested or challenged by any Obligated Party or any
Obligated Party shall deny that it has any further liability or obligation
under any of the Loan Documents, or any lien or security interest created by
the Loan Documents shall for any reason cease to be a valid, perfected Lien
upon any of the Collateral purported to be covered thereby with the priority
required by the Loan Documents. 


                    (k)
Any of the following events shall occur or exist with respect to any Obligated
Party or any ERISA Affiliate: (i) any Prohibited Transaction involving any
Plan; (ii) any Reportable Event with respect to any Plan; (iii) the filing
under Section 4041 of ERISA of a notice of intent to terminate any Plan or the
termination of any Plan; (iv) any event or circumstance that constitutes
grounds entitling the PBGC to institute proceedings under Section 4042 of ERISA
for the termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings; or (v) complete
or partial withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer
Plan or the reorganization, insolvency, or termination of any Multiemployer
Plan; and in each case above, such event or condition, together with all other
events or conditions, if any, have subjected or could reasonably be expected to
subject any Obligated Party to any tax, penalty, or other liability to a Plan,
a Multiemployer Plan, the PBGC, or otherwise (or any combination thereof) which
in the aggregate exceed or could reasonably be expected to exceed an amount
that will have a Material Adverse Effect. 


                    (l)
Any Obligated Party or any officer of an Obligated Party is criminally indicted
or convicted for (i) a felony committed in the conduct of any Obligated Party’s
business or (ii) violating any state or federal law (including the Controlled
Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of
War Materials Act) that could lead to forfeiture of any material property or
any Collateral. 


                    (m)
Any Obligated Party shall fail to pay when due any amount owing to any Bank, or
fail to perform any of its obligations, under any contract or agreement with
such Bank. 


                    (n)
A Change of Control shall have occurred or any event occurs or condition exists
that has a Material Adverse Effect. 


                    (o)
Ian Edmonds, or a successor acceptable to Agent in its reasonable discretion,
shall cease to be chief executive officer of Borrower. 


          Section
10.2. Remedies. If any Event of Default shall occur and be continuing,
Agent may (and if directed by Required Banks, shall) do any one or more of the
following: 


                    (a)
Acceleration. By written notice to Borrower, declare all outstanding
principal of and accrued and unpaid interest on the Loans and the Revolving
Notes and all other amounts payable by Borrower or any other Obligated Party
under the Loan Documents immediately due and payable, and the same shall
thereupon become immediately due and payable, without further notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, protest, or other formalities of any kind, all of which are hereby
expressly waived by Borrower. 


                    (b)
Termination of Commitments. Terminate the Commitments without notice to
Borrower. 


CREDIT
AGREEMENT, Page 49





                    (c)
Judgment. Reduce any claim to judgment. 


                    (d)
Foreclosure. Foreclose or otherwise enforce any Lien granted to Agent
for the benefit of itself and the other Secured Parties to secure payment and
performance of the Obligations in accordance with the terms of the Loan
Documents. 


                    (e)
Default Rate. Impose the Default Rate on all outstanding Loans and, to
the maximum extent permitted by applicable law, other Obligations. 


                    (f)
Rights. Exercise any and all rights and remedies afforded by the laws of
the State of Texas, by any of the Loan Documents, by equity, or otherwise. 


Notwithstanding
the foregoing, upon the occurrence of an Event of Default under Section
10.1(e) or (f), the Commitments of all of the Banks (including the
Swingline Commitment of the Swingline Bank) shall automatically terminate, and
the outstanding principal of and accrued and unpaid interest on the Loans and
all other amounts payable by Borrower under the Loan Documents shall thereupon
become immediately due and payable without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, protest,
or other formalities of any kind, all of which are hereby expressly waived by
Borrower. 


          Section
10.3. Performance by Agent. If Borrower or any other Obligated Party
shall fail to perform any covenant or agreement in accordance with the terms of
the Loan Documents, Agent may, at the direction of Required Banks, perform or
attempt to perform such covenant or agreement on behalf of Borrower or the
applicable Obligated Party. In such event, Borrower shall, at the request of
Agent, promptly pay any amount expended by Agent or the Banks in connection
with such performance or attempted performance to Agent at the Principal
Office, together with interest thereon at the applicable Default Rate from and
including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither Agent nor any Bank shall have any liability or
responsibility for the performance of any obligation of Borrower or any other
Obligated Party under any Loan Document. In the event Agent pays any amounts
under this Section 10.3, Agent shall notify Borrower and Borrower shall
promptly pay any amount so expended by Agent together with interest at the
Default Rate from and including the date of such expenditure to but excluding
the date that such expenditure is paid in full. Amounts due and unpaid under
this Section 10.3 may be funded as Revolving Loans or Swingline Loans
pursuant to the terms of Section 4.1(b). 


          Section
10.4. Setoff. If an Event of Default shall have occurred and be
continuing, each Bank is hereby authorized at any time and from time to time,
without prior notice to any Obligated Party (any such notice being hereby
expressly waived by each Obligated Party), to set off and apply any and all
deposits (general, time, demand, provisional, or final) at any time held and
other indebtedness at any time owing by such Bank to or for the credit or the
account of any Obligated Party against any and all of the Obligations,
irrespective of whether or not Agent or such Bank shall have made any demand
under such Loan Documents and although such Obligations may be unmatured. Each Bank
agrees promptly to notify Borrower (with a copy to Agent) after any such setoff
and application; provided, that the failure to give such notice shall
not affect the validity of such setoff and application. The rights and remedies
of each Bank hereunder are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Bank may have. 


CREDIT
AGREEMENT, Page 50





ARTICLE XI.


Agent


          Section
11.1. Appointment, Powers and Immunities. Each Bank and the Issuing Bank
hereby appoints and authorizes Wells Fargo to act as its agent hereunder and
under the other Loan Documents and to act as agent hereunder and under the
other Loan Documents for each Bank’s Affiliates who are owed Obligations (such
Affiliate by acceptance of the benefits of the Loan Documents ratifies such
appointment) with such powers as are specifically delegated to Agent by the
terms of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Neither Agent nor any of its Affiliates, officers,
directors, employees, attorneys, or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
any Loan Document or any of the other Loan Documents except for its or their
own gross negligence or willful misconduct. Without limiting the generality of
the preceding sentence, Agent (a) may treat the payee of any Revolving Note as
the holder thereof until it receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to Agent; (b)
shall have no duties or responsibilities except those expressly set forth in
the Loan Documents, and shall not by reason of any Loan Document be a trustee
or fiduciary for any Secured Party; (c) shall not be required to initiate any
litigation or collection proceedings under any Loan Document except to the
extent requested by Required Banks; (d) shall not be responsible to any Secured
Party for any recitals, statements, representations, or warranties contained in
any Loan Document, or any certificate or other documentation referred to or
provided for in, or received by any of them under, any Loan Document, or for
the value, validity, effectiveness, enforceability, or sufficiency of any Loan
Document or any other documentation referred to or provided for therein or for
any failure by any Person to perform any of its obligations thereunder; (e) may
consult with legal counsel (including counsel for Borrower), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants, or experts; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties. As to any matters
not expressly provided for by any Loan Document, Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by Required Banks, and such instructions of
Required Banks and any action taken or failure to act pursuant thereto shall be
binding on all of the Secured Parties; provided, however, that
Agent shall not be required to take any action which exposes it to personal
liability or which is contrary to any Loan Document or applicable law. 


          Section
11.2. Rights of Agent as a Bank. With respect to its Commitment, the
Loans made by it, the Letters of Credit issued by it as the Issuing Bank, and
the Revolving Notes issued to it, Wells Fargo (and any successor acting as
Agent) in its capacity as a Bank hereunder shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it were
not acting as Agent, and the term “Bank” or “Banks” shall, unless the context
otherwise indicates, include Agent in its individual capacity. Agent and its
Affiliates may (without having to account therefor to any Secured Party) accept
deposits from, lend money to, act as trustee under indentures of, provide
merchant banking services to, and generally engage in any kind of banking,
trust, or other business with Borrower, any Obligated Party or any other
Subsidiary, and any other Person who may do business with or own securities of
Borrower, any Obligated Party or any other Subsidiary, all as if it were not
acting as Agent and without any duty to account therefor to the Secured
Parties. 


          Section
11.3. Defaults. Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default (other than the non-payment of principal of or
interest on the Loans or of Commitment Fees) unless Agent has received notice
from a Bank or Borrower specifying such Default and stating that such notice is
a “Notice of Default.” In the event that Agent receives such a notice of the 


CREDIT
AGREEMENT, Page 51





occurrence of
a Default, Agent shall give prompt notice thereof to the Banks (and shall give
each Bank prompt notice of each such non-payment). Agent shall (subject to Section
11.1) take such action with respect to such Default as shall be directed by
Required Banks in accordance with this Agreement, provided that unless and
until Agent shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable and in the best interest of
the Banks. 


          Section
11.4. Indemnification. THE BANKS HEREBY AGREE TO INDEMNIFY AGENT FROM
AND HOLD AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED UNDER SECTIONS
12.1 AND 12.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF BORROWER
UNDER SECTIONS 12.1 AND 12.2), RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENT PERCENTAGES, ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS,
EXPENSES (INCLUDING ATTORNEYS’ FEES AND EXPENSES), AND DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST AGENT IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY AGENT UNDER OR IN
RESPECT OF ANY OF THE LOAN DOCUMENTS; PROVIDED, THAT NO BANK SHALL BE
LIABLE FOR ANY PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY AGENT’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS
THE EXPRESS INTENTION OF THE BANKS THAT AGENT SHALL BE INDEMNIFIED HEREUNDER
FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS’ FEES AND EXPENSES), AND DISBURSEMENTS OF ANY KIND OR
NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONTRIBUTORY NEGLIGENCE OF AGENT. WITHOUT LIMITING ANY OTHER PROVISION OF THIS
SECTION, EACH BANK AGREES TO REIMBURSE AGENT PROMPTLY UPON DEMAND FOR ITS PRO
RATA SHARE (CALCULATED ON THE BASIS OF THE COMMITMENT PERCENTAGES) OF ANY AND
ALL OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS’ FEES AND EXPENSES) INCURRED BY
AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT AGENT IS NOT
REIMBURSED FOR SUCH EXPENSES BY BORROWER. 


          Section
11.5. Independent Credit Decisions. Each Bank agrees that it has
independently and without reliance on Agent or any other Bank, and based on
such documentation and information as it has deemed appropriate, made its own
credit analysis of each Obligated Party and decision to enter into any Loan
Document and that it will, independently and without reliance upon Agent or any
other Bank, and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under any Loan Document. Except as otherwise
specifically set forth herein, Agent shall not be required to keep itself
informed as to the performance or observance by Borrower or any other Obligated
Party of any Loan Document or to inspect the properties or books of Borrower or
any other Obligated Party. Except for notices, reports, and other documents and
information expressly required to be furnished to the Banks by Agent hereunder
or under the other Loan Documents, Agent shall not have any duty or
responsibility to provide any Bank with any credit or other financial
information concerning the affairs, financial condition, or business of
Borrower or any other Obligated Party (or any of their Affiliates) which may
come into the possession of Agent or any of its Affiliates. 


CREDIT
AGREEMENT, Page 52





          Section
11.6. Several Commitments. The Commitments and other obligations of the
Banks under any Loan Document are several. The default by any Bank in making a
Loan in accordance with its Commitment shall not relieve the other Banks of
their obligations under any Loan Document. In the event of any default by any
Bank in making any Loan, each non-defaulting Bank shall be obligated to make
its Loan but shall not be obligated to advance the amount which the defaulting
Bank was required to advance hereunder. No Bank shall be responsible for any
act or omission of any other Bank 


          Section
11.7. Successor Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, Agent may resign at any time by giving
notice thereof to the Banks, the Issuing Bank, and Borrower, and Agent may be
removed at any time by Required Banks if it has breached its obligations under
the Loan Documents. Upon any such resignation or removal, Required Banks will have
the right to appoint a successor Agent with Borrower’s consent, which shall not
be unreasonably withheld. If no successor Agent shall have been so appointed by
Required Banks and shall have accepted such appointment within thirty (30) days
after the retiring Agent’s giving of notice of resignation or the Required
Banks’ removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks and the Issuing Bank, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States of America or any
State thereof and having combined capital and surplus of at least Two Hundred
Fifty Million Dollars ($250,000,000). Upon the acceptance of its appointment as
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all rights, powers, privileges, immunities, contractual
obligations, and duties of the resigning or removed Agent, and the resigning or
removed Agent shall be discharged from its duties and obligations under the
Loan Documents. After any Agent’s resignation or removal as Agent, the
provisions of this Article XI shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
Agent. 


          Section
11.8. Release of Collateral. Agent is irrevocably authorized by the
Secured Parties, without any consent or further agreement of any Secured Party
and at the option and in the discretion of Agent (except to the extent that
Agent is obligated to provide such release in accordance with any Loan Document
or applicable law), to 


                    (a)
release any Liens of Agent encumbering any Collateral that is sold or otherwise
disposed of in accordance with this Agreement or any other Loan Document
(including Section 8.7 hereof), except to the extent that such sale or other
disposition is required or intended to be subject to the Liens of Agent; 


                    (b)
release any Liens of Agent attaching to the assets of any Obligated Party,
and/or release any Obligated Party from its obligations under the Loan
Documents, if all Equity Interests of such Obligated Party are sold or
otherwise disposed of in accordance with this Agreement or any other Loan
Document (including Section 8.7 hereof), except to the extent that such
sale or other disposition is required or intended to be subject to the Liens of
Agent; and 


                    (c)
release any Liens of Agent encumbering any property or asset granted to or held
by Agent under any Loan Document when all of the Loan Obligations and Hedge
Obligations have been Fully Satisfied. 


It is agreed
and understood by Secured Parties that, in connection with any release of any
Liens of Agent, Agent may (at its option and in its discretion) rely upon any
certification of any Loan Party which Agent in good faith believes to be true. 


          Section
11.9. Bank Affiliates Rights. By accepting the benefits of the Loan
Documents, any Affiliate of a Bank that is owed any Obligation is bound by the
terms of the Loan Documents. Notwithstanding the foregoing: (a) neither Agent,
the Issuing Bank, any Bank nor any Obligated Party 


CREDIT
AGREEMENT, Page 53





shall be
obligated to deliver any notice or communication required to be delivered to
any Bank under any Loan Documents to any Affiliate of any Bank; and (b) no
Affiliate of any Bank that is owed any Obligation shall be included in the
determination of the Required Banks or entitled to consent to, reject, or
participate in any manner in any amendment, waiver or other modification of any
Loan Document. Neither Agent nor the Issuing Bank shall have any liabilities,
obligations or responsibilities of any kind whatsoever to any Affiliate of any
Bank who is owed any Obligation. Agent and the Obligated Parties shall deal
solely and directly with the Successor Bank Affiliate or the related Bank of
any such Affiliate (who is not a Successor Bank Affiliate) in connection with
all matters relating to the Loan Documents. The Obligation owed to such
Affiliate shall be considered the Obligation owed to its related Bank for all
purposes under the Loan Documents and such Bank shall be solely responsible to
the other parties hereto for all the obligations of such Affiliate under any
Loan Document. 


ARTICLE XII.


Miscellaneous


          Section
12.1. Expenses. Borrower hereby agrees to pay on demand: (a) all
reasonable costs and out–of–pocket expenses of Agent or any Bank arising in
connection with the preparation, negotiation, execution, and delivery of the
Loan Documents executed and delivered on the Closing Date, including, without
limitation, the reasonable fees and out–of–pocket expenses of legal counsel for
Agent and Banks (but limited to one such counsel unless Agent otherwise
agrees); (b) all reasonable costs and out–of–pocket expenses of Agent or any
Bank arising in connection with the preparation, negotiation, execution, and
delivery of any of the Loan Documents executed and delivered after the Closing
Date and any and all amendments or other modifications to the Loan Documents;
(c) all reasonable costs and expenses of Agent and the Banks in connection with
any Event of Default and the enforcement of any Loan Document, including,
without limitation, the reasonable fees and out–of–pocket expenses of one legal
counsel for Agent and one legal counsel for the Banks; (d) all transfer, stamp,
documentary, or other similar taxes, assessments, or charges levied by any
Governmental Authority in respect of any Loan Document; (e) all reasonable
costs, out–of–pocket expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by any Loan Document; (f) all other
reasonable costs and out–of–pocket expenses reasonably incurred by Agent in
connection with any Loan Document, including, without limitation, all
reasonable costs, out–of–pocket expenses, and other charges incurred in
connection with obtaining any audit or appraisal in respect of the Collateral;
(g) all reasonable out–of–pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder; and (h) all reasonable fees, costs and
expenses of the Swingline Bank arising in connection with any Swingline Loan.
Amounts due and unpaid under this Section 12.1 may be funded as
Revolving Loans or Swingline Loans pursuant to the terms of Section 4.1(b).



          Section
12.2. Indemnification. BORROWER INDEMNIFIES AGENT, THE ISSUING BANK, AND
EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST,
ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND
EXPENSES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY
ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE,
ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY BORROWER OR
ANY OTHER OBLIGATED PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER
AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE,
THREATENED RELEASE, 


CREDIT AGREEMENT,
Page 54






DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF BORROWER OR ANY
SUBSIDIARY, (E) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT OR ANY PAYMENT
OR FAILURE TO PAY WITH RESPECT TO ANY LETTER OF CREDIT, (F) ANY AND ALL TAXES,
LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON AGENT OR ANY BANK IN RESPECT OF ANY
LETTER OF CREDIT, OR (G) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; PROVIDED THAT ANY PERSON
ENTITLED TO BE INDEMNIFIED UNDER THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR
HELD HARMLESS AGAINST ANY LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, OR EXPENSES ARISING OUT OF OR RESULTING FROM ITS GROSS
NEGLIGENCE, WILLFUL MISCONDUCT OR BREACH OF ITS OBLIGATIONS UNDER THE LOAN
DOCUMENTS AS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT OF
COMPETENT JURISDICTION. WITHOUT LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT
IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE
INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND
OUT–OF–POCKET EXPENSES) ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONTRIBUTORY NEGLIGENCE OF SUCH PERSON UNLESS SUCH NEGLIGENCE IS FOUND TO CONSTITUTE
GROSS NEGLIGENCE. 


          Section
12.3. Limitation of Liability. None of Agent, any Bank, or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and, by the execution of the Loan Documents to
which it is a party, each Obligated Party hereby waives, releases, and agrees
not to sue any of them upon, any claim for any special, indirect, incidental,
consequential, or punitive damages suffered or incurred by Borrower or any
other Obligated Party in connection with, arising out of, or in any way related
to any of the Loan Documents or any of the transactions contemplated by any of
the Loan Documents. 


          Section
12.4. No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by Agent or any Bank shall have
the right to act exclusively in the interest of Agent and the Banks and shall
have no duty of disclosure, duty of loyalty, duty of care, or other duty or
obligation of any type or nature whatsoever to any Obligated Party or any of
its shareholders or any other Person. 


          Section
12.5. No Fiduciary Relationship. The relationship between the Obligated
Parties on the one hand and Agent and each Bank on the other is solely that of
debtor and creditor, and neither Agent nor any Bank has any fiduciary or other
special relationship with any Obligated Party, and no term or condition of any
of the Loan Documents shall be construed so as to deem the relationship between
the Obligated Parties on the one hand and Agent and each Bank on the other to
be other than that of debtor and creditor. 


          Section
12.6. Equitable Relief. Each Obligated Party recognizes that in the
event it fails to pay, perform, observe, or discharge any or all of its obligations
under the Loan Documents, any remedy at law may prove to be inadequate relief
to Agent and the Banks. Each Obligated Party therefore agrees that Agent and
the Banks, if Agent or the Required Banks so request, shall be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages. 


          Section
12.7. No Waiver; Cumulative Remedies. No failure on the part of Agent,
the Issuing Bank, or any Bank to exercise and no delay in exercising, and no
course of dealing with respect to, any 


CREDIT AGREEMENT, Page 55





right, power,
or privilege under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power, or privilege under
any Loan Document preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The rights and remedies
provided for in the Loan Documents are cumulative and not exclusive of any
rights and remedies provided by law. 


          Section
12.8. Successors and Assigns. 


                    (a)
Benefit and Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) no
Obligated Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Bank (and any
attempted assignment or transfer by any Obligated Party without such consent
shall be null and void) and (ii) no Bank may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section. Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of
this Section) and, to the extent expressly contemplated hereby, the Affiliates,
officers, directors and agents of each of Agent, the Issuing Bank and the
Banks) any legal or equitable right, remedy or claim under or by reason of this
Agreement.  


                    (b)
Assignments. 


                              (i)
Subject to the conditions set forth in paragraph (b)(ii) below, any Bank
may assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
or Revolving Exposure at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of: 


                                        (A)
Borrower, provided no consent of Borrower shall be required for an
assignment to a Bank, an Affiliate of a Bank, an Approved Fund or, if a Default
has occurred and is continuing, any other assignee; and 


                                        (B)
Agent, provided that no consent of Agent shall be required for an
assignment to an assignee that is a Bank. 


                              (ii)
Assignments shall be subject to the following additional conditions: 


                                        (A)
except in the case of an assignment to a Bank or an Affiliate of a Bank or an
assignment of the entire remaining amount of the assigning Bank’s Commitment or
Loans, the amount of the Commitment or Loans of the assigning Bank subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to Agent) shall not be less than
One Million Dollars ($1,000,000) with respect to Revolving Loans unless each of
Borrower and Agent otherwise consent, provided that no such consent of
Borrower shall be required if a Default has occurred and is continuing; 


                                        (B)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Bank’s rights and obligations under this Agreement; and 


                                        (C)
the parties to each assignment shall execute and deliver to Agent an Assignment
and Assumption, together with a processing and recordation fee of Three
Thousand Five Hundred Dollars ($3,500). 


CREDIT AGREEMENT, Page 56 





For the
purposes of this Section 12.8(b), the term “Approved Fund” means
any Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of an entity
that administers or manages a Bank. 


                              (iii)
Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment
and Assumption the Eligible Assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Bank under this Agreement, and the assigning Bank
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Bank’s
rights and obligations under this Agreement, such Bank shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section
4.11 and Section 12.2). Any assignment or transfer by a Bank of
rights or obligations under this Agreement that does not comply with this Section
12.8 shall be treated for purposes of this Agreement as a sale by such Bank
of a participation in such rights and obligations in accordance with paragraph
(c) of this Section. 


                              (iv)
Agent, acting for this purpose as an agent of Obligated Parties, shall maintain
at one of its offices a copy of each Assignment and Assumption delivered to it
and a register for the recordation of the names and addresses of the Banks, and
the Commitment of, and principal amount of the Loans, the interests thereon and
LC Disbursements owing to, each Bank pursuant to the terms hereof from time to
time (the “Register”). The entries in the Register shall be conclusive
absent manifest error, and Obligated Parties, Agent, the Issuing Bank and the
Banks may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Bank hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by Obligated Parties, the Issuing Bank and any Bank, at any
reasonable time and from time to time upon reasonable prior notice. 


                              (v)
Upon its receipt of a duly completed Assignment and Assumption executed by an
assigning Bank and an Eligible Assignee, the Eligible Assignee’s completed
Administrative Questionnaire (unless such assignee shall already be a Bank hereunder),
the processing and recordation fee referred to in paragraph (b) of this
Section and any written consent to such assignment required by paragraph (b) of this Section, Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register; provided that if
either the assigning Bank or the Eligible Assignee shall have failed to make
any payment required to be made by it pursuant to Section 2.7(d), 4.1,
4.7, 4.8, or 11.4, Agent shall have no obligation to
accept such Assignment and Assumption and record the information therein in the
Register unless and until such payment shall have been made in full, together
with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph. 


                    (c)
Participations. 


                              (i)
Any Bank may, without the consent of Obligated Parties, Agent or the Issuing
Bank, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Bank’s rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Bank’s obligations under this Agreement shall remain unchanged,
(B) such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations and (C) Borrower, Agent, the Issuing Bank
and the other Banks shall continue to deal solely and directly with such Bank
in connection with such Bank’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Bank sells such a participation
shall provide that such Bank shall retain the sole right to enforce this
Agreement and to approve any amendment, 


CREDIT AGREEMENT, Page 57





modification
or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Bank will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the third sentence of Section 12.11 that directly affects
such Participant. Subject to paragraph (c)(ii) of this Section,
Obligated Parties agree that each Participant shall be entitled to the benefits
of Section 4.9 to the same extent as if such Participant were a Bank and
had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.4 as though it were a Bank, provided
such Participant agrees to be subject to Section 4.7 as though it were a
Bank. 


                              (ii)
A Participant shall not be entitled to receive any greater payment than the
applicable Bank would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with Borrower’s prior written consent. A Participant
that would be a foreign Bank if it were a Bank shall not be entitled to the
benefits of Section 4.9 unless Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of
Borrower, to comply with Section 4.10 as though it were a Bank. 


                    (d)
Pledge. Any Bank may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Bank, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank (including, without limitation, a Federal
Home Loan Bank), and this Section 12.8 shall not apply to any such
pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Bank from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Bank as a party hereto. 


          Section
12.9. Survival. All representations and warranties made in any Loan
Document or in any document, statement, or certificate furnished in connection
with any Loan Document shall survive the execution and delivery of the Loan
Documents and no investigation by Agent or any Bank or any closing shall affect
the representations and warranties or the right of Agent or any Bank to rely
upon them. Without prejudice to the survival of any other obligation of
Obligated Parties hereunder, the obligations of Obligated Parties under Sections
12.1 and 12.2 shall survive repayment of the Loans and the Revolving
Notes, the expiration or termination of the Letters of Credit, and termination
of the Commitments. 


          Section
12.10. Entire Agreement. THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN
DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE
ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF AND
MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. 


          Section
12.11. Amendments. Neither this Agreement nor any other Loan Document
nor any provision hereof or thereof may be waived, amended or modified except
(a) in the case of this Agreement, pursuant to an agreement or agreements in
writing entered into by Obligated Parties and the Required Banks or (b) in the
case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by Agent and the Obligated Party or Obligated Parties that
are parties thereto, with the consent of the Required Banks; provided that no
such agreement shall (i) increase the Commitment of any Bank without the
written consent of such Bank, (ii) reduce or forgive the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
or forgive any interest or fees payable hereunder, without the written consent
of each Bank directly affected thereby, (iii) postpone any scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any date for
the payment of 


CREDIT AGREEMENT, Page 58






any interest,
fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Bank directly affected thereby,
(iv) change Section 4.6 in a manner that would alter the manner in which
payments are shared, without the written consent of each Bank, (v) change any
of the provisions of this Section or the definition of “Required Banks” or any
other provision of any Loan Document specifying the number or percentage of
Banks required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Bank, (vi) release any Guarantor from its obligation under its Guaranty
(except as otherwise permitted herein or in the other Loan Documents), without
the written consent of each Bank, or (vii) except as provided in Section
11.8 or in any Loan Document, release all or a material portion of the
Collateral, without the written consent of each Bank; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
Agent, the Issuing Bank or the Swingline Bank hereunder without the prior
written consent of Agent, the Issuing Bank or the Swingline Bank, as the case
may be. Notwithstanding any other provisions of this Section 12.11 to
the contrary, this Agreement may be amended pursuant to documentation executed
in accordance with Section 2.10 which only needs to be signed by the
Obligated Parties, the Agent and the Banks increasing or providing new
Revolving Commitments thereunder. 


          Section
12.12. Maximum Interest Rate. 


                    (a)
No interest rate specified in any Loan Document shall at any time exceed the
Maximum Rate. If at any time the interest rate (the “Contract Rate”) for
any Obligation shall exceed the Maximum Rate, thereby causing the interest
accruing on such Obligation to be limited to the Maximum Rate, then any
subsequent reduction in the Contract Rate for such Obligation shall not reduce
the rate of interest on such Obligation below the Maximum Rate until the
aggregate amount of interest accrued on such Obligation equals the aggregate
amount of interest which would have accrued on such Obligation if the Contract
Rate for such Obligation had at all times been in effect. 


                    (b)
No provision of any Loan Document shall require the payment or the collection
of interest in excess of the maximum amount permitted by applicable law. If any
excess of interest in such respect is hereby provided for, or shall be adjudicated
to be so provided, in any Loan Document or otherwise in connection with this
loan transaction, the provisions of this Section shall govern and prevail and
neither any Obligated Party nor the sureties, guarantors, successors, or
assigns of any Obligated Party shall be obligated to pay the excess amount of
such interest or any other excess sum paid for the use, forbearance, or
detention of sums loaned pursuant hereto. In the event any Bank ever receives,
collects, or applies as interest any such sum, such amount which would be in
excess of the maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the Obligations, and, if the
principal of the Obligations has been paid in full, any remaining excess shall
forthwith be paid to Borrower. In determining whether or not the interest paid
or payable exceeds the Maximum Rate, Obligated Parties and each Bank shall, to
the maximum extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee, or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the entire contemplated term of the Obligations so that
interest for the entire term does not exceed the Maximum Rate. 


          Section
12.13. Notices. All notices and other communications provided for in any
Loan Document to which Borrower or any other Obligated Party is a party shall
be given or made in writing and telecopied, mailed by certified mail return
receipt requested, or delivered, by hand or overnight courier service, to the
intended recipient at the “Address for Notices” specified below its name on the
signature pages hereof and, if to any other Obligated Party, at the address for
notices for Borrower, or, as to any party, at such other address as shall be
designated by such party in a notice to each other party given in 


CREDIT AGREEMENT, Page 59





accordance
with this Section. Except as otherwise provided in any Loan Document, all such
communications shall be deemed to have been duly given when transmitted by
telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, three (3) Business Days after
being duly deposited in the mails, in each case given or addressed as
aforesaid; provided, however, notices to Agent pursuant to Section
4.3 shall not be effective until received by Agent. Notices and other
communications to the Banks hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by Agent; provided
that the foregoing shall not apply to notices pursuant to Article II or Sections 4.1 through 4.3 unless otherwise agreed by Agent and the applicable
Bank. Agent or any Obligated Party may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications. All notices
and other communications given to any party hereto by electronic communications
in accordance with the provisions of this Agreement shall be deemed to have
been given on the date of receipt.  


          Section
12.14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas (without regard to the
conflicts of law provisions thereof) and the applicable laws of the United
States of America. 


          Section
12.15. Counterparts. This Agreement may be executed in one or more
counterparts and on telecopy counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
agreement. 


          Section
12.16. Severability. Any provision of any Loan Document held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of any Loan Document and the effect thereof shall be
confined to the provision held to be invalid or illegal. 


          Section
12.17. Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement. 


          Section
12.18. Construction. Borrower, each other Obligated Party (by its
execution of the Loan Documents to which its is a party), Agent, and each Bank
acknowledges that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review the Loan Documents with
its legal counsel and that the Loan Documents shall be construed as if jointly
drafted by the parties thereto. 


          Section
12.19. Independence of Covenants. All covenants under the Loan Documents
shall be given independent effect so that, if a particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the permissions of, another covenant
shall not avoid the occurrence of a Default if such action is taken or such
condition exists. 


          Section
12.20. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF AGENT OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT
THEREOF. 


          Section
12.21. USA PATRIOT Act. Each Bank that is subject to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies Borrower and each Obligated Party that,
pursuant to the requirements of the Act, it is required to obtain, 


CREDIT AGREEMENT, Page 60





verify and
record information that identifies Borrower and the other Obligated Parties,
which information includes the name and address of Borrower and the Obligated
Party and other information that will allow such Bank to identify Borrower and
the other Obligated Parties in accordance with the Act. 


          Section
12.22. Confidentiality. Each of Agent and the Banks agrees to maintain
the confidentiality of the Confidential Information (as defined below), except
that Confidential Information may be disclosed (a) to its Affiliates and its
and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Confidential Information and instructed to keep such
Confidential Information confidential), (b) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (c) to any
other party hereto, (d) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (e) subject to an agreement containing provisions
substantially the same as those of this Section, to any Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in, any
of its rights or obligations under this Agreement, (f) with the prior written
consent of Borrower or (g) to the extent such Confidential Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to Agent or any Bank on a nonconfidential basis from a
source other than a party to this Agreement. For purposes of this Section, “Confidential
Information” means all information received from Borrower, any of its
Subsidiaries, Agent, or any Bank relating to Borrower or any of its
Subsidiaries or any of their respective businesses which is marked
confidential. Any Person required to maintain the confidentiality of
Confidential Information as provided in this Section shall be considered to
have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Confidential
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, “Confidential Information”
shall not include, and Agent and each Bank may disclose without limitation of
any kind, any information with respect to the “tax treatment” and “tax
structure” (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to Agent or such
Bank relating to such tax treatment and tax structure; provided that with respect
to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transaction as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby. 


[Remainder of page is intentionally left
blank]


CREDIT AGREEMENT, Page 61 






          IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.


	
  

 	
  

 	
  

 
	
  

 	
 BORROWER:

 
	
  

 	
  

 
	
  

 	
 UNIVERSAL
 POWER GROUP, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
 Name:

 	
 Ian Edmonds

 
	
  

 	
 Title:

 	
 President

 
	
  

 	
  

 	
  

 
	
  

 	
 Address for Notices:

 
	
  

 	
  

 	
  

 
	
  

 	
 1720 Hayden
 Drive

 
	
  

 	
 Carrollton,
 Texas 75006

 
	
  

 	
 Attn:

 	

 


 
	
  

 	
 Facsimile
 No.: (___) ___-____

 
	
  

 	
  

 	
  

 
	
  

 	
 OTHER OBLIGATED PARTY:

 
	
  

 	
  

 	
  

 
	
  

 	
 MONARCH
 OUTDOOR ADVENTURES, LLC

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
 Name:

 	
 Ian Edmonds

 
	
  

 	
 Title:

 	
 Manager

 



CREDIT AGREEMENT, Page 62









	
  

 	
  

 	
  

 
	
  

 	
 AGENT AND BANKS:

 
	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO
 BANK, NATIONAL ASSOCIATION, as Agent, Issuing Bank, Swingline Bank and as a
 Bank

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Clint
 Bryant, Senior Vice President

 
	
  

 	
  

 	
  

 
	
  

 	
 Address for
 Notices and Lending Office:

 
	
  

 	
  

 	
  

 
	
  

 	
 4975 Preston Park. Blvd. - Suite 280

 
	
  

 	
 Plano, TX 75093

 
	
  

 	
 Attention: Clint Bryant

 
	
  

 	
 Facsimile
 No.: (972) 867-5674

 



CREDIT
AGREEMENT, Page 63